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Merlin Entertainments

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Merlin Entertainments Group PLC
Company typePublic limited company
LSE: MERL
IndustryVisitor Attractions
FoundedDecember 1998; 25 years ago (1998-12)
FounderNick Varney
Headquarters
Poole, Dorset
,
United Kingdom
Key people
Sir John Sunderland (Chairman)
Nick Varney (CEO)
Products
ServicesFamily visitor attractions and resort theme parks
Revenue£1,278 million (2015)[1]
£291 million (2015)[1]
£170 million (2015)[1]
Number of employees
22,000 (2016)[2]
Websitemerlinentertainments.biz

Merlin Entertainments PLC is a British company headquartered in Poole, Dorset which operates 124 attractions, 16 hotels and 3 holiday villages in 25 countries. It is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index. Merlin Entertainments is financially backed by The Blackstone Group who also operate many other Entertainment companies across the world.

History

In December 1998, Nick Varney, Andrew Carr and the senior management team of Vardon Attractions completed a management buyout of the company to form Merlin Entertainments Group Ltd. with the backing of the private equity firm Apax Partners. Apax sold the company to another financial investor, Hermes Private Equity, in 2004.[3]

Legoland

When the Legoland theme parks came up for sale, Varney wanted to buy it but Hermes did not want to invest more capital and sold Merlin to Blackstone Group for about £110 million in 2005. Blackstone negotiated to buy control of Legoland for about £250 million, then merged it with Merlin. As part of the deal, KIRKBI AS, the investment arm of LEGO owners, took a share in Merlin Entertainments.[4][5] Under Blackstone in 2006, Merlin went on to buy Gardaland, an Italian theme park.[6]

Tussauds

Early in 2007 Merlin also purchased The Tussauds Group, owner of the Madame Tussauds celebrity wax attractions, for £1 billion. After the Tussauds acquisition, Dubai International Capital held 20% of Merlin Entertainment.[7] The Tussauds Group as a separate entity ceased to exist, and control of its attractions, including Madame Tussauds, The London Eye, Chessington World of Adventures, Alton Towers, Thorpe Park, Warwick Castle and Heide Park passed to Merlin. On 17 July 2007, as part of the financing for the Tussauds deal, Merlin sold the freeholds of Alton Towers, Thorpe Park, Warwick Castle and Madame Tussauds to private investor Nick Leslau and his investment firm Prestbury under a sale and leaseback agreement.[8] Although the attraction sites are owned by Leslau, the attractions themselves are to be operated by Merlin, leasing each back on a renewable 35-year lease. Chessington World of Adventures was not included in the deal due to being the most profitable. By arranging the sale-leaseback of the properties and giving Dubai International Capital a stake in the combined entity, Merlin was able to acquire Tussauds without the need for any further capital investments from Blackstone or its other shareholders.[9]

Florida

On 15 January 2010, Merlin Entertainments bought a defunct Winter Haven, Florida-based theme park, Cypress Gardens, and reopened it as Legoland Florida theme park.[10]

Australia

In late 2010, it was announced that Merlin would purchase approximately A$115 million worth of entertainment attractions located in Australia and New Zealand from Village Roadshow Theme Parks and Attractions. The sale would include Sydney Aquarium, Sydney Wildlife World, Oceanworld Manly, Sydney Tower and the Koala Gallery in Australia, in addition to Kelly Tarlton's Underwater World in New Zealand.[11] On 3 March 2011, the deal was finalised.[12] This was followed by the $140 million acquisition of Living and Leisure Australia which owned several attractions in the Asia-Pacific region including UnderWater World, Melbourne Aquarium, Falls Creek Alpine Resort, Hotham Alpine Resort, Otway Fly, Illawarra Fly, Busan Aquarium and Siam Ocean World.[13][14]

On 28 June 2013, Merlin Australia's Madame Tussauds in Sydney placed a wax figure of the former Prime Minister, Julia Gillard, into a mock queue of a Centrelink office in central Sydney. Deposed by the Australian Labor Party in the evening of 26 June, and replaced by Kevin Rudd, the publicity stunt drew wide attention, but received some criticism for the "disrespect" shown to the office of the Prime Minister, and the first female leader of Australia.[15]

Listing

Merlin had planned to go public in early 2010, but market turbulence postponed those plans. Instead, Blackstone sold 20% of the company to the private equity firm CVC Capital Partners, reducing Blackstone's holding to 34%. CVC acquired another 8% from the Dubai investment fund which is no longer involved with the company, giving it 28% in all. KIRKBI, a Danish family trust that owns LEGO, also increased its stake, emerging as the largest shareholder, with 36%. CVC paid a price that valued Merlin at £2.25 billion[16] – more than six times what Merlin and Legoland together were worth when Blackstone acquired them five years earlier. Blackstone's investment was by that point worth more than three and a half times what it had paid.[17]

On 8 November 2013 Merlin floated 30% of the company on the London Stock Exchange valuing the private equity-backed company at almost £3.4bn.[18]

Thorpe Park

In October 2013 mental health campaigners accused Merlin's Thorpe Park attraction of putting profit before the welfare of those with mental illness. Its Halloween attractions included mazes which 'draw on classic horror film content' including one called The Asylum, which mimicked a mental health institution. The attraction was contrasted unfavourably in some media, Twitter and by mental health campaigners who believed The Asylum perpetrated stigmatising and damaging images of mental illness [19] Thorpe Park issued a statement indicating the subject would be reviewed.[20]

Alton Towers

On 2 June 2015 two carriages on The Smiler ride at The Alton Towers Resort collided. One of the cars was empty, and the other car contained 16 people.[21] Merlin issued a statement that the incident was under investigation.[21]Since the crash in 2015; on the 19th of March 2016, 'The Smiler' reopened to the public after 9 months.[22] The investigation found that the crash was, according to Merlin Entertainments (who own Alton Towers), 'due to human error'.[23]

References

  1. ^ a b c "Preliminary Results for 2015". Merlin Entertainments. Retrieved 25 March 2016.
  2. ^ "Merlin Way". Merlin Entertainments. Retrieved 25 March 2016.
  3. ^ "Blackstone Acquires Merlin Entertainment". blackstone.com. Retrieved 30 March 2015.
  4. ^ "Why you shouldn't buy shares in Legoland owner Merlin Entertainment". Telegraph.co.uk. 30 October 2013. Retrieved 30 March 2015.
  5. ^ "Tour Legoland California". CaliforniaResortLife.com. Retrieved 13 August 2015.
  6. ^ "Merlin Entertainments Group acquires Italy's Gardaland". Coaster Buzz. 16 October 2006. Retrieved 25 March 2016.
  7. ^ "Tussauds firm bought in £1bn deal". BBC News. 5 March 2007. Retrieved 12 May 2010.
  8. ^ "Alton Towers sold in £622m deal". BBC News. 17 July 2007. Retrieved 12 May 2010.
  9. ^ King of Capital, p. 313.
  10. ^ "Cypress Gardens Sold to Legoland". 15 January 2010. Retrieved 15 January 2010.
  11. ^ AAP (17 December 2010). "Village Roadshow sells Sydney Attractions". Sydney Morning Herald. Retrieved 17 December 2010.
  12. ^ AAP (3 March 2011). "Plans for a Madame Tussauds in Sydney". Sydney Morning Herald. Retrieved 12 March 2011.
  13. ^ Ooi, Teresa (20 December 2011). "Merlin Entertainments Group conjures $140m James Packer bid". The Australian. Retrieved 4 June 2012.
  14. ^ Danckert, Sarah (13 February 2012). "Merlin ready to wrap up Living and Leisure deal". The Australian. Retrieved 4 June 2012.
  15. ^ "A wax figurine of Julia Gillard at Centrelink isn't a publicity stunt, it's just plain stupid - and offensive". The Sydney Morning Herald. 28 June 2013.
  16. ^ CVC Capital Partners press release[dead link], 24 June 2010.
  17. ^ King of Capital, p. 314.
  18. ^ Why you shouldn't buy shares in Legoland owner Merlin Entertainment The Telegraph, 30 October 2013
  19. ^ Thorpe Park defends Halloween asylum attraction BBC
  20. ^ Thorpe Park ‘considering changing Asylum maze over name row’ Metro
  21. ^ a b "Alton Towers closed after Smiler rollercoaster crash". BBC News. Retrieved 8 June 2015.
  22. ^ "Alton Towers Smiler ride reopens nine months after horror crash". BBC News. Retrieved 31 March 2016.
  23. ^ "Alton Towers' Smiler victims want ride to stay closed". BBC News. Retrieved 31 March 2016.
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