Busch Gardens owner to sell stock to public
Busch Gardens Tampa and the 10 other SeaWorld Entertainment theme parks will soon add a new twist to their corporate heritage: Their parent company plans to sell $540 million in stock to the public.
SeaWorld Entertainment is expected to begin publicly trading on the New York Stock Exchange on Thursday under the ticker symbol SEAS.
The public offering marks a milestone for Busch Gardens Tampa, a diversion Anheuser-Busch launched in 1959 in Tampa with a beer hospitality facility that added rides and evolved into one of the top dozen U.S. theme parks in attendance.
What's next for Busch Gardens Tampa can be gleaned from a 197-page prospectus on the IPO filed with the Securities and Exchange Commission and interviews with people familiar with its operations. Company officials in Tampa and corporate headquarters in Orlando said they cannot comment during the IPO “quiet period.”
“Because the same managers who know how to operate the park will remain in charge, I don't think guests will see any significant differences,” said Paul Ruben, North American editor of the Park World industry trade journal.
“Being publicly traded may emphasize short-term profits rather than long-term-investments, which might delay capital improvements, but I think that's unlikely,” Ruben said. “Blackstone left management intact and the Busch team knows how to operate their parks, which are among the best in the nation.”
Plans for the public offering follow a Belgian brewer's hostile takeover of Anheuser-Busch in 2008 and InBev's subsequent sale of the theme park properties in 2009 to the world's largest private equity firm, the Blackstone Group.
Blackstone reportedly rejected bids to sell SeaWorld Entertainment and instead is trimming its holdings but retaining majority control in the theme park group. The assumed initial public offering price would be $25.50 with a proposed maximum of $27, the filing said.
The prospectus lists SeaWorld Entertainment's competitive strengths ranging from a strong industry position with familiar brands, one of the world's largest collections of 67,000 animals, and a growing profit margin and strong cash flow.
It cited innovative experiences at its parks, such as the Cheetah Hunt coaster ride adjacent to the cheetah habitat at Busch Gardens Tampa as an experience that would be hard for a competitor to replicate.
Other strategies include a drive to increase theme park attendance with new attractions; to enhance in-park spending with offers such as an all-day-dining deal; and to use smartphone applications with interactive maps that show the nearest dining locations, gift shops and wait times for rides.
The filing does not separate financial data for the individual theme parks, but the most recent Themed Entertainment Association report said Busch Gardens ranked 12th in 2011 attendance with 4.3 million visitors, 2 percent more than 2010.
Busch Gardens has 30 rides, 16 animal habitats and 18 shows and employs more than 3,500 people.
Net income for the Entertainment group rebounded from a $45.5 million loss in 2010 to $19.1 million in 2011 to $77.4 million in 2012.
Some observers credited Blackstone with the financial turnaround, while others point to the rebound in the economy that boosted SeaWorld revenue from nearly $1.2 billion in 2010 to more than $1.4 billion in 2012.
“Since parks in Central Florida are destination resorts rather than regional theme parks, they were affected more by the recession,” Ruben said. “Busch Gardens Tampa is both destination and regional, so they were somewhat affected.”
The prospectus cites multiple risks to investing in Sea World Entertainment stock, ranging from accidents and adverse publicity — one example being the death of a trainer working with a killer whale at SeaWorld Orlando in 2010 — to bad weather and the need to raise capital for improvements from operations and third parties.
But it cited as a competitive strength a management team with an average tenure of 28 years in the industry.
That's led by President and Chief Executive Officer Jim Atchison, Dan Brown, chief operating officer of SeaWorld and Discovery Cove, and Donnie Mills, chief operating officer of Busch Gardens and Sesame Place theme parks. All have experience at Busch Gardens Tampa.
“I anticipate tremendous growth within the parks,” said Thom Stork, a former vice president of marketing for Busch Gardens and Sea World and the President and CEO of the Florida Aquarium. “Jim and Dan and Donnie and Jim Dean who heads Busch Gardens Tampa have proven their leadership.”
The biggest change to the Busch Gardens Tampa experience took place when InBev eliminated free samples of Anheuser-Busch brands of beer, Ruben said.
“The rides are thrilling,” Ruben said. “The entertainment continues to be first rate, the animals fascinating. But I, for one, on a hot day still miss the free beer.”
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