Like Travelport and Orbtiz Worldwide, SeaWorld is weighed down by Blackstone's financial maneuverings, and the private equity firm will be first in line for payment if the IPO is successful.
And one thing that’s certain about the outcome: If the IPO goes ahead, then SeaWorld owner Blackstone would retain control of the company and its critters, including Shamu and 60,000 other fish, as well as 7,000 cheetahs, tigers, manatees, polar bears, and other not-so-rare species.
Blackstone, which has $204.6 billion in assets under management worldwide, bought SeaWorld from Anheuser-Busch in 2009, and would retain voting control post-IPO.
The SeaWorld empire takes in 11 destinations and theme parks under the brands SeaWorld, Shamu, Busch Garden and Sesame Place, among others.
Follow the money
The net proceeds of the IPO would go to pay down debt generated from the 2009 leveraged buyout, make a one-time payment to Blackstone, and the rest would go toward general corporate purposes.
SeaWorld has become what it characterizes in its S-1 filing as a “highly leveraged” company under Blackstone ownership. And, as is Blackstone’s modus operandi when it makes such acquisitions, the private-equity company has already repaid itself a big chunk of the $2.4 billion it paid for SeaWorld — even before this potential IPO.
SeaWorld is a profitable company. Through the first nine months of 2012, it made $86.2 million in net income on $715 million in revenue.
Blackstone is heavily involved in the global real estate business, with $54 billion in real estate assets under management, and it looks at its SeaWorld investment through that prism.
“Our competitive position is protected by the combination of our powerful brands, extensive animal collection and expertise and premier in-park assets located on valuable real estate,” SeaWorld states.
In fact, SeaWorld estimates that the replacement value of its assets, including 2,000 acres it owns, would be more than $5 billion.
Social media exposure
But, much of that value could be at risk from adverse publicity, such as the beating that SeaWorld took in social media and elsewhere when a killer whale drowned a trainer at SeaWorld in Orlando in 2010.
“The considerable expansion in the use of social media over recent years has compounded the potential scope of the negative publicity that could be generated by such incidents,” SeaWorld states, referring to incidents at its own parks, as well as competitors’ facilities. “If any such incident occurs during a time of high seasonal demand, the effect could disproportionately impact our results of operations for the year.”
SeaWorld’s advertising practices make a positive “impression,” helping to counter any brand hits, and so do its Android and iOS mobile apps.
SeaWorld states that through the first three-quarters of 2012, its “television and digital platforms” generated 5.6 billion impressions. The company’s iPhone app alone has been downloaded more than 1 million times from June 2011 to December 2012.
As the U.S. grapples with “fiscal cliff” negotiation, it is important to note that SeaWorld Entertainment’s 11 parks will be highly dependent on consumer sentiment domestically.
Only 11.25% of SeaWorld’s 24 million visitors in the 12 months ended September 30, 2012, were international guests, the company reports.
However, SeaWorld believes its diversification — theme parks spread across the U.S. that cater to varying demographics of regional and “destination guests” — will provide some protection.
And, SeaWorld takes some solace in the fact that the U.S. theme park industry, which hosts around 315 million guests annually, has seen its numbers fall less drastically than the impact state parks have felt in recent years.
Puck and IPO pluck
Global warming aside, SeaWorld plans on opening Antartica: Empire of the Penguin at SeaWorld Orlando in 2013.
“[It] will feature a new animated penguin character, Puck, and coincide with the launch of new in-park merchandise, mobile gaming, and consumer products designed around the Puck character,” SeaWorld states.
SeaWorld and owner Blackstone also hope the debut of Puck and the new exhibit will coincide with a successful IPO in 2013.