Amusement-park Businesses Cedar Fair, Six Flags Entertainment To Merge

Ohio-headquartered Cedar Fair (FUN) and Texas-headquartered Six Flags Entertainment Corporation (SIX), that own and operate amusement parks and theme parks, on Thursday announced that they have entered into a definitive agreement to combine in a merger of equals transaction.

The combined company, with a pro forma enterprise value of approximately $8 billion based on both companies’ debt and equity values as of October 31, 2023, is expected to benefit from expanded and complementary portfolio of 42 Iconic Parks and 9 Resort Properties Across 17 States, Canada and Mexico.

The merger is expected to result in approximately $200 million of annual synergies, including $120 million of cost savings anticipated within two years following close. The deal is expected to be EPS accretive for both Cedar Fair unitholders and Six Flags shareholders within the first 12 months following close.

According to the merger terms unanimously approved by both the Boards of Directors, Cedar Fair unitholders would receive one share of common stock in the new combined company for each unit owned. Based on the agreed Six Flags Exchange Ratio, Six Flags shareholders would receive 0.5800 shares of common stock in the new combined company for each share owned.

Upon close of the transaction, Cedar Fair unitholders would own approximately 51.2%, and Six Flags shareholders would own approximately 48.8%, of the combined company’s fully diluted share capital on a pro forma basis.

One business day prior to the close of the transaction, Six Flags would be declaring a special cash dividend composed of: (i) a fixed amount of $1.00 per outstanding Six Flags share, totaling approximately $85 million in the aggregate, plus, (ii) an amount per outstanding Six Flags share equal to (a) the aggregate per unit distributions declared or paid by Cedar Fair to unitholders with a record date following today’s date and prior to the close of the transaction, multiplied by (b) the Six Flags Exchange Ratio, which special dividend will be payable to Six Flags shareholders of record as of one business day prior to the close of the transaction, contingent on the closing of the transaction.

Upon closing of the transaction, the combined company would operate under the name Six Flags and trade under the ticker symbol FUN on the NYSE and will be structured as a C Corporation. The combined company will be headquartered in Charlotte, North Carolina, and would maintain significant finance and administrative operations in Sandusky, Ohio.

The merger is expected to close in the first half of 2024, following receipt of Six Flags shareholder approval. Approval by Cedar Fair unitholders is not required.

Six Flags’ largest shareholder, which owns approximately 13.6% of Six Flags’ shares outstanding, has signed a voting and support agreement to vote in favor of the transaction. The transaction is not expected to trigger any change of control provision under Cedar Fair’s and Six Flags’ respective outstanding Notes. The companies expect to refinance their respective revolving credit facilities, and Six Flags expects to refinance the Six Flags Term Loan, ahead of transaction close.

Perella Weinberg Partners is serving as exclusive financial advisor and Weil, Gotshal & Manges LLP and Squire Patton Boggs (US) LLP are serving as legal counsel to Cedar Fair. Goldman Sachs & Co. LLC is serving as exclusive financial advisor and Kirkland & Ellis LLP is serving as legal counsel to Six Flags.

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