SeaWorld Entertainment raised $100 million in its initial public offering filing in December, but the Argyle Journal reported the theme park giant is currently in talks to make a private sale that would raise a larger amount of cash than the IPO.

The private equity company Blackstone purchased SeaWorld three years ago for $2.7 billion and transformed the amusement parks from zero profit in 2010 to a net profit of $19 million in 2011 and $86 million in the first nine months of 2012. SeaWorld’s IPO and possible private sale is a positive indication for growth in the entertainment sector in the United States.

SeaWorld operates 11 parks, including three SeaWorld locations in San Diego, San Antonio and Orlando. It also runs Sesame Place in Pennsylvania and Busch Gardens in Tampa and several other locations. Six of its parks are open year-round and five of them are seasonal.

Entertainment sector stocks performed very well in 2012, according to Forbes. Six Flags experienced a 45% increase in its stock price last year and Cedar Fair rose 49%.

SeaWorld’s success depends heavily on visitor attendance at its various theme parks. Park admission represents 70% of its total revenue. But a large chunk of SeaWorld’s profit comes from the amount of money customers spend inside the park. The average admission price of $35 brought in $716 million in 2012; in-park spending averaged $22 per customer resulting in an additional $445 million in revenue. The in-park spending represents most of the company’s profit: $346 million out of the $445 million adds to their bottom line.

SeaWorld is experiencing positive sales indications. Sales have increased ever since Blackstone bought the parks in 2009: total sales rose 11% in 2011 to $1.2 billion. Both park attendance and per-capita in-park spending has increased. Attendance in the first nine months of 2012 was 19.86 million compared to 19.04 million in the same period the previous year.

In SeaWorld’s prospectus, the company discussed expanding the business internationally. There is a big deal in the works with a group in Dubai, which would license the SeaWorld brand to four parks using the names Seaworld, Aquatica, Busch Gardens and Discovery Cove. SeaWorld also has plenty of room for growth in the United States; their parks are currently located in three U.S. cities (San Diego, San Antonio and Orlando). Its parent company, Blackstone, also owns Merlin Entertainment of Legoland fame. Joint ventures between Merlin and SeaWorld parks are also potential growth opportunities, in addition to other expansions in the SeaWorld brand.

Whether SeaWorld opts for an initial public offering or a private sale, the company is poised to expand its business.

[cf]tracking[/cf]

Get Free Updates!

Stay in the loop with a bi-monthly newsletter, with all our news from the previous week.

I agree to have my personal information transfered to MailChimp ( more information )

We will never give away, trade or sell your email address. You can unsubscribe at any time.

Please Leave A Comment

comments

Related posts:

Twitter Initial Public Offering Likely for 2013, Predicts PrivCo private sector job growthPrivate Sector Ended 2013 with Strong Job Gains, Report Finds More Than 10 Million Jobs Create Longest Private Sector Job Increase in American History Google Sales Strong, but Struggle in Cautious Mobile Sector Job Growth Strong in May with 135,000 Jobs Added