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 7079     
 
 
 
News stories: 1 - 30 of 7079     
 
 
 
company profile
Company profile: Matrix Fitness
Unrelenting drive to be the best at what we do underpins activity throughout our vertically integrated business life cycle.
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
The Center for Sustainable Landscapes in Pittsburgh, US
José Almiñana
"We are committed to designing evocative landscapes informed by the best environmental science"

The Andropogon principal on pushing the boundaries of landscape design for the benefit of humans and nature

Hospitality: High standards
"We tried to take over in a friendly way"

The Standard’s first London hotel is bold, fun and full of surprising touches

features
Architects Monk Mackenzie created an interior box to house the new studios
"We’ve designed the space so that the atmosphere is intimate"

Les Mills’ new studio spaces at its iconic Auckland City Gym showcase a trend away from masculine ‘grunty’ gyms to something altogether different

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

features
Martin Jochman founded JADE+QA in 2013. He formerly worked for Atkins
"We didn’t want to put in any gimmicks. We wanted to create a building that’s inherently sustainable through passive sustainability"

When Martin Jochman set out to transform an old quarry into a luxury hotel, he faced some serious challenges

Interview: Elizabeth de Portzamparc
Elizabeth de Portzamparc
"We need to stop the destruction of our world through predatory practices. We need to think of the future"

The architect behind Nimes’ Musée de la Romanité on designing to counter loneliness and the need for more cultural buildings

Interview: Blurred lines
Scott Lee became president of SB Architects in 2000. Tracy Lee founded TLee Spas in 2015
"We design to connect the guest to the place, positioning people at the centre of the design"

Architect Scott Lee and spa consultant Tracey Lee on marrying the worlds of design and wellness in a series of interesting projects

cladkit product news
ZHD'S MEW Coffee Table explores relationship between surface and structure
The MEW Coffee Table is described as an investigation into the relationship between surface and structure
Lauren Heath-Jones
Zaha Hadid Design has partnered with Italian furniture design firm Sawaya & Moroni to create the Mew Coffee Table. The ...
Duravit launches Tempano shower trays
The Tempano trays feature a state-of-the-art design that combines a linear slope with a high drainage rate
Lauren Heath-Jones
Duravit, a Germany-based bathroom fixtures company, has launched Tempano, a series of easy-to-install shower trays for the home. Available in ...
Mater partners with Ditzel family to create eco-friendly furniture using reclaimed plastic
The furniture uses plastic from recycled fishing nets
Lauren Heath-Jones
Mater, an ethical design brand based in Denmark, has launched a furniture collection made from plastic reclaimed from the ocean. ...
cladkit product news
BD Barcelona Design reveals Cristallo by the late Alessandro Mendini
Cristallo was the last design from acclaimed designer and architect Alessandro Mendini
Lauren Heath-Jones
Design Studio BD Barcelona Design has released Cristallo, a limited-edition cabinet designed by the late architect and designer Alessandro Mendini, ...
Crown overhaul changing rooms at Saunton Sands spa
Crown Sports Lockers installed rain of Nebraska Oak clothes lockers with RFID Digilocks in the changing rooms
Lauren Heath-Jones
Saunton Sands Hotel in Devon, UK, has completed a £2m expansion of its spa and wellness facilities. The upgrade included ...
Alusid's Sequel collection combines craftsmanship and sustainability says founder
The Sequel collection is billed as the 'most waste-efficient and sustainable' on the market
Lauren Heath-Jones
Alusid, a creator of eco-friendly surfaces, has partnered with Parkside to launch the Sequel range, the brand's first collection of ...
cladkit product news
Tom Dixon Studio to relaunch iconic Pylon chair
Pylon was first designed more than 20 years ago
Lauren Heath-Jones
Originally conceived in his metal workshop in the early 90's, the Pylon chair was Dixon's attempt to create the world's ...
Paul Kelley pushes 'technical boundaries' with modular furniture cube system
The system is designed to enable users to create multifunctional, adaptable pieces, where they are in complete control of the design and function of their furniture
Lauren Heath-Jones
British designer Paul Kelley has created a modular magnetic cube furniture system that enables users to create multifunctional, adaptable pieces, ...
nea studio showcase seaweed's design potential with hand-crafted algae lamps
The seaweed lamps were inspired by Edwards Anker's ethos of incorporating local and organic materials in her designs to give them a sense of place
Lauren Heath-Jones
Nina Edwards Anker, a Brooklyn-based designer and founder of architecture and design practice nea studio, has created a new collection ...
x
Sign up with CLAD for regular news updates