Candover sees attractions in Parques Reunidos

Candover, a London-based private equity firm, has partnered with former portfolio company Bourne Leisure to buy European theme park operator Parques Reunidos in what has become an increasingly hot sector for private equity.

No price was disclosed for the secondary buyout, in which global private equity firm Advent International has exited its investment in the Spanish-based park operator after more than three years. However, various reports indicate a sale price of up to €900m, a significant premium to Advent International’s original €173m buyout, which at the time was the first public-to-private in Spain as well as one of the largest buyouts in the country.

Since then, Parques Reunidos has made several bolt-on acquisitions and installed Richard Golding, formerly at rival park operator Aspro Ocio, as chief executive. Golding and his team are expected to maintain their roles under Candover’s ownership. Parques Reunidos Group currently manages 22 leisure parks, including zoological gardens and theme and water parks in Spain, Belgium, Norway, France, Italy and Argentina.

The Parques Reunidos divestment is one of the largest by a private equity sponsor in the Spanish market to date and illustrates how fertile the sector has proven to be for financial buyers on both sides of the Atlantic in recent years.

Palamon Capital Partners, a London-based growth investor, generated a 2.4 times return on its investment with the sale last June of the majority of its interest in StarParks Group, an operator of a series of themed leisure parks in Europe that originally formed the European division of US-based Six Flags.

Palamon sold six of the group’s seven leisure parks to Compagnie des Alpes, a European parks and ski resort operator, and a private entrepreneur for €155m, but decided to hold on to its German site, Movie Park, as the firm felt that there was still more value to be realised.

New York-headquartered Blackstone Group is one of the few private equity houses that can claim to be a specialist in the theme park sector, having pitched up at a number of European attractions.

Last March, Blackstone took UK holiday village operator Center Parcs private in a £205m transaction, before acquiring seven villages managed by Center Parcs Europe through its real estate arm. The US firm wasn’t its first private equity owner, however: Mid Ocean Partners bought the business from Scottish & Newcastle in 2001 before selling it on to broker Collins Stewart in late 2003. Collins Stewart went on to float the business on London’s AIM.

In May 2005, Blackstone purchased Merlin Entertainments, owner of 28 attractions including the UK’s Dungeon chain and Sea Life Centre chains and Belgium’s Earth Explorer, for £102.5m from Hermes Private Equity, which made two times cash on the sale. A few months later, Blackstone bought Legoland for €375m.

Across the pond, Blackstone also previously owned the US division of Six Flags, acquiring the theme park operator in 1991 before selling the business to Time Warner in 1993. In 2000, Blackstone paid just over US$2bn for Rank’s 50% stake in Universal Studios Escape, which is now partially realised.

Dubai International Capital, currently hitting the headlines for its upcoming bid for Liverpool FC, has also bid for a number of park operators and currently owns London wax museum operator Tussauds Group. DIC, Blackstone and Palamon are believed not to have bid for Parques Reunidos.