Lego buys Merlin in a deal valuing it at US$7.49bn

Global attractions giant, Merlin Entertainments, has been sold to the family behind toy firm Lego in partnership with two other investors in a deal at 12 x EBITDA.

Merlin is currently the world’s second largest family entertainment company – with Disney being the largest – and it has more than 130 attractions around the world.

The acquisition values Merlin's shares at £4.8bn (€5.35bn, USS$6.1bn), plus a further £1.1bn in debt.

The deal will see a newly created entity, Bidco, take control of 70 per cent of Merlin's shares.

Bidco is owned by Kirkbi – a wholly owned subsidiary of KIRKBI A/S, the private holding and investment company of the Kirk Kristiansen family which manages the LEGO brand – private equity giant Blackstone Core Equity Partners and Canadian pension fund CPPIB.

Kirkbi will own 50 per cent of Bidco, while Blackstone and CPPIB will jointly own the other half.

Kirkbi already owns almost a third (29.58 per cent) of the shares in Merlin. It is anticipated that, upon the acquisition becoming effective, Kirkbi will transfer the Shares to Bidco.

In a statement, Merlin said: "The independent directors of Merlin Entertainments are pleased to announce that they have reached agreement on the terms of a recommended cash offer to be made by Bidco for the entire issued and to be issued share capital of Merlin – other than Merlin Shares owned or controlled by Kirkbi.

"The acquisition values the entire issued and to be issued share capital of Merlin at approximately £4.8bn on a fully diluted basis and implies an enterprise value of £5.9bn (US$7.49bn €6.58bn) – a multiple of approximately 12 x Merlin's underlying EBITDA of £494m (US$627m €550m) for the year ended 29 December 2018."

Kirkbi and Blackstone jointly controlled Merlin in the eight years prior to the 2013 public listing, during which time Merlin became the second largest location-based entertainment business globally, behind Disney.

In a short statement, the new owners added: "The consortium recognises that significant, long-term investment is required to ensure the longevity of the existing assets and to drive continued growth for Merlin and its stakeholders."

Merlin, which was floated on the London Stock Exchange in 2013, will have its shares de-listed as part of the deal.

BACKGROUND

The Merlin portfolio has expanded over the decades by acquisition and organic growth. The company acquired the Tussaud's Group attractions in May 2007 via its backer, The Blackstone Group, for £1bn (which was then US$1.9bn), has grown its own brands, based on IPs including Lego Discovery Centres, Shrek, Bear Grylls and Sea Life Centres to create a midway division, and has acquired attractions from other operators.

GLOBAL EXPANSIONIt entered the Australian market in 2011 when it purchased the Sydney Attractions Group, which at that time operated the Sydney Aquarium, Sydney Tower and Sydney Wildlife World. It operates 13 attractions in total in Australia and New Zealand.

PARTNERSHIP WITH LEGO

Merlin's partnership with LEGO goes back to July 2005, when Blackstone acquired the Legoland theme parks portfolio from Kirkbi in a £259m deal which included four sites – in Germany, UK, Denmark and US – and a 176-room Legoland hotel adjacent to the theme park in the Danish town of Billund.

In December 2004, Lego had reported that it was unlikely to break even and would consequently be transferring its LEGOLAND parks either partly or wholly to new owners and a separate company, so it could focus on its core play materials business.

MERGER OF LEGO THEME PARKS AND MERLINBlackstone merged the business with Merlin Entertainments, which it had acquired the previous month. At the time, the combined businesses welcomed 12m visitors a year.

SALE AND LEASEBACK WITH PRESTBURY

On 17 July 2007, the freeholds of Alton Towers, Thorpe Park, Warwick Castle and Madame Tussauds were sold to Nick Leslau and his investment firm Prestbury under a sale and leaseback agreement.

The company said would be using the money for investment purposes and to pay off outstanding debts. Although the attractions assets are owned by Prestbury, they continue to be operated by Merlin on a renewable 35-year lease.

STOCK MARKET FLOATATIONThe company floated on the London Stock Exchange in November 2013, at which time it was valued at £3.5bn. Around 1,700 of Merlin's 10,000 permanent staff were awarded shares on the basis of long service or outstanding contribution

NICK VARNEY

CEO Nick Varney has been at the helm of the business since its inception.

After a stint at Tussauds Group in the 1990s, where he was marketing director of Alton Towers and head of group marketing, he moved to become MD of Vardon Attractions – owner of the Sea Life Centres – and a main board director of Vardon plc.

The move was widely questioned, as Varney had been heir apparent to become CEO of Tussauds, but the decision paid off when Merlin acquired The Tussauds Group.

In 1999, Varney led a management buyout of Vardon Attractions to form Merlin Entertainments and in 2005, initiated the process which led to its acquisition by The Blackstone Group.

In an exclusive interview with Attractions Management, Varney said the secret of the company's success is "Having a great team, an audacious vision, and a lot of luck."

FURTHER INSIGHTSFor further insights into the history of the development and funding of Merlin, read Deloitte's Nigel Bland in Attractions Management from 2014 here.

Lego  Merlin  Nick Varney  Tussauds Group  Blackstone  CPPIB  Kirkbi 
Related stories
04 Mar 2019

Peppa Pig theme park potentially in the works as Varney discusses Merlin IP merits

01 Mar 2019

Upbeat 2018 results for Merlin Entertainments provide impetus for further growth

07 Nov 2018

Lego Movie World to open at Legoland Florida in Q2 2019

25 Oct 2018

Merlin reveals plans to grow Australian portfolio with new attractions

Global attractions giant, Merlin Entertainments, has been sold to the family behind toy firm Lego in partnership with two other investors in a deal at 12 x EBITDA. Merlin is currently the world’s second largest family entertainment company – with Disney being the largest – and it has more than 130 attractions around the world. The acquisition values Merlin's shares at £4.8bn (€5.35bn, USS$6.1bn), plus a further £1.1bn in debt.
TAW,VAT
The Kirk Kristiansen family, which manages the LEGO brand, will become a majority owner of Merlin
More news
News stories: 1 - 30 of 7580     
 
 
 
News stories: 1 - 30 of 7580     
 
 
 
company profile
Company profile: Gharieni Group GmbH
We strive for a seamless integration of functional equipment to create an unparalleled and memorable experience for clients.
videos
BluGalaxy a Division of Blu Spas
Blu Spas
This animation showcases the beautiful concept design of BluGalaxy Spa.
Try cladmag for free!
Sign up with CLAD to receive our regular ezine, instant news alerts, free digital subscriptions to CLADweek, CLADmag and CLADbook and to request a free sample of the next issue of CLADmag.
sign up
features
Smooth in-situ concrete dominates the building’s interior spaces including the foyer below
Alexander Schwarz
"Our aim was to create a place celebrating public space and accessibility"

The opening of the James-Simon- Galerie on Berlin’s Museum Island completes two decades of work for David Chipperfield Architects. The lead designer talks us through the building

The reception features a Karel Teige collage artwork
Tina Norden
"We have created an approach which is playful, provocative but also functional"

Conran and Partners’ Tina Norden on playing with colour at Prague’s newly redesigned Hotel Maximilian

Catalogue Gallery
Click on a catalogue to view it online
To advertise in our catalogue gallery: call +44(0)1462 431385
features
Roosegaarde’s Space Waste Lab aims to upcycle space waste into sustainable products
"I want to demonstrate that creativity is our true capital as humans "

Rather than feeling fearful and helpless about the future, we must design a way out of the environmental problems we have created, argues the innovative Dutch designer, artist and inventor Daan Roosegaarde

Polizzi worked closely with architect and designer Tommaso Ziffer on Hotel de la Ville in Rome
Olga Polizzi is director of design for Rocco Forte Hotels and also owns two of her own hotels
"On Via Sistina, everything breathes history. At the same time I wanted to reflect the modern hunger for the fantastical - Tommaso Ziffer"

Following the highly anticipated launch of Rome’s Hotel de la Ville, Rocco Forte’s director of design reflects on a fascinating project

Manuelle Gautrand
"The cities where you have good cultural buildings and facilities – it’s a way for people to mix, to share the city in a much deeper way"

The French architect and winner of the 2017 European Prize for Architecture tells us why she is determined to surprise

The restaurants serve traditional, regional dishes in contemporary surroundings
"Wellness embraces the entire holiday experience"

The design of the newly-opened Lefay Resort and Spa Dolomitti in Italy aims to celebrate and protect its spectacular surroundings

cladkit product news
Painting with Light pushes boundaries to create unforgettable visual concepts
The team combines lighting, video, sound and special effects, with scenic and architectural elements, to create unforgettable visual experiences
Megan Whitby
Belgium-based light and video design studio, Painting with Light, will translate the story of your location into a visual experience, ...
Cosm unveils Experience Centre with ‘one of a kind’ LED dome
The new Experience Centre houses a 20m LED dome
Magali Robathan
Cosm, a global technology company that builds end-to-end solutions for immersive experiences, has unveiled its Experience Centre which houses a ...
ASPA International launches handheld UV-C light disinfection lamp
The compact plug-in product can be used easily in a commercial spa or domestic setting to disinfect surfaces with UV-C light
Megan Whitby
For over 30 years, ASPA International has designed and built high-quality spas for the hotel, health and wellness sectors. During ...
cladkit product news
Atelier Alain Ellouz launches handcrafted precious stone lighting collection
LYRA has a sleek, cylindrical design complete with an elegant brass dimming switch
Megan Whitby
LYRA, GAMA, MONA and ATHENA are the first pieces from designer Atelier Alain Ellouz’s new.édition collection of handcrafted stone lighting ...
LianTronics’ glasses-free 3D Star Trek LED screen attracts attention
Magali Robathan
LianTronics’ giant curved LED wall with stunning glasses-less 3D spaceship display effect has attracted many on the street of Chengdu, ...
Matteo Thun grows Allaperto collection with new suspended outdoor armchair
Megan Whitby
Allaperto, the lounge collection spawned by the partnership between design studios, Matteo Thun, Ethimo and Antonio Rodriguez, has been expanded ...
cladkit product news
Siminetti unveils first glimpses of Mother of Pearl decorative surfaces inspired by the four seasons
The new winter design is finished with naturally occurring hexagonal patterns found in snowflakes
Megan Whitby
Siminetti has collaborated with British designer Chrisanna London to create a luxury Mother of Pearl decorative surface range inspired by ...
Christie laser projectors power new Five Senses Bubble dome theatre
The dome aims to integrate technology with arts and culture
Magali Robathan
Christie® GS Series 1DLP® laser projectors are delivering vivid and lifelike visuals in a new dome theatre located in Xiong’an ...
Móz Designs columns anchor the world’s largest indoor aquarium
The design of the columns was inspired by the sea
Magali Robathan
After a two-year renovation, Oakland-based metal experts Móz Designs have unveiled their inclusion in Georgia Aquarium’s new shark gallery. Located ...
x
Sign up with CLAD for regular news updates