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SeaWorld Files to Raise $540 Million at $27 per Share

SeaWorld Files to Raise $621 Million
The company will offer 23 million shares at $24 to $27 a piece, Orlando-based SeaWorld said today in a filing. Photographer: Ricardo Ramirez Buxeda/Orlando Sentinel/MCT via Getty Images

SeaWorld Entertainment Inc. is seeking as much as $540 million in a U.S. initial public offering after owner Blackstone Group LP rejected takeover bids for the aquatic theme park operator.

The Orlando, Florida-based company and existing owners will offer 20 million shares, a 22 percent stake, for $24 to $27 apiece, according to a regulatory filing. The midpoint would value SeaWorld at $3.98 billion including net debt, data compiled by Bloomberg show.

Blackstone, the world’s largest private-equity firm, is opting for an IPO to begin exiting its 2009 investment after snubbing offers from Apollo Global Management LLC and Onex Corp., people familiar with the matter have said. New York-based Blackstone joins Apollo and other buyout firms in taking portfolio companies public this year as stocks surge to record levels.

“The perception toward private-equity backed IPOs was negative up until about last year,” said Josef Schuster, the founder of Chicago-based Ipox Schuster LLC. “But performance on some recent offerings has increased investor confidence that there’s medium to long-term value in these names.”

The offering is scheduled to price April 18, according to data compiled by Bloomberg. The $3.98 billion enterprise value sought by SeaWorld is about 10.1 times the company’s earnings before interest, taxes, depreciation and amortization of $393.8 million in the 12 months through December, data compiled by Bloomberg show. Competitor Six Flags Entertainment Corp.’s ratio is about 13.7 times.

Other Valuations

Six Flags, based in Grand Prairie, Texas, traded yesterday at about 13.5 times free cash flow, or cash from operations minus capital expenditures, according to data compiled by Bloomberg. At the midpoint of the proposed price range, SeaWorld would be valued at about 21 times free cash flow.

Blackstone took control of SeaWorld after agreeing in 2009 to buy Anheuser-Busch InBev NV’s amusement-park business in a deal then valued at as much as $2.7 billion. Blackstone and affiliated funds, which currently own all of SeaWorld’s equity, will trim their stake to 74 percent after the offering, according to the documents.

SeaWorld generated more than $1.4 billion in revenue last year, with the bulk coming from admission fees. The company operates almost a dozen parks under names such as SeaWorld, Sesame Place and Busch Gardens. The company’s parks attracted more than 24 million customers last year.

SeaWorld’s proceeds from the IPO will be used to reduce long-term borrowings to about $1.66 billion, filings show. The company plans to list on the New York Stock Exchange under the symbol SEAS. Goldman Sachs Group Inc., JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp., Barclays Plc and Wells Fargo & Co. are managing the sale.

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