Blackstone Strikes $2.9B Deal for Great Wolf Resorts

An affiliate will take a majority stake in the family-oriented entertainment company, which specializes in water park-themed properties.
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A Blackstone affiliate, Blackstone Real Estate Partners IX, is acquiring a 65 percent controlling interest in Great Wolf Resorts Inc., from current owner Centerbridge Partners LP. The deal calls for Blackstone and Centerbridge to form a $2.9 billion joint venture to own Great Wolf, a leading owner and operator of family-oriented entertainment resorts in the U.S. and Canada.

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Great Wolf owns 18 resorts, or lodges, with more in the pipeline, including one in Scottsdale, Ariz., due to open this fall, and a Northern California site in Manteca, Calif., scheduled for a mid-2020 opening. Every Great Wolf lodge contains a full-service hotel, expansive indoor waterpark, recreational activities, food and beverage offerings and themed experiences. The company has about 6,000 full-time employees.

Tyler Henritze, head of U.S. acquisitions for Blackstone Real Estate, said in a prepared statement that Blackstone was impressed with Great Wolf’s growth in recent years. Since 2015, the resort company has opened seven new lodges. Centerbridge, a private investment management firm, with about $27 billion in capital under management, acquired Great Wolf in 2015 for $1.4 billion, including debt, according to the Wall Street Journal. Another private equity player, Apollo Global Management, acquired the company in 2012 for more than $700 million, including debt, after a bidding war with KSL Capital Partners LLC. Apollo took the company private that year, WSJ reported.

Noting Blackstone’s expertise in the hospitality industry, Great Wolf CEO Murray Hennessy, said the company was pleased to work with Blackstone on continuing the rapid expansion. North America’s largest indoor waterpark resort company, Great Wolf has locations in Wisconsin Dells, Wis.; Sandusky, Ohio; Traverse City, Mich.; Kansas City, Kan.; Williamsburg, Va.; Pocono Mountains, Pa.; Niagara Falls, Ontario, Canada; Mason, Ohio; Grapevine, Texas; Grand Mound, Wash.; Fitchburg, Mass.; Charlotte, N.C.; Garden Grove, Calif.; Colorado Springs, Colo.; Bloomington, Minn.; LaGrange, Ga., and Gurnee, Ill.

Goldman Sachs & Co. LLC and Citigroup Global Markets Inc. are serving as financial advisors to Great Wolf, and Simpson Thacher & Bartlett LLP is serving as legal counsel to Great Wolf. Fried, Frank, Harris, Shriver & Jacobson LLC is serving as legal counsel to Blackstone.

Theme park interests

Blackstone, a global private equity firm with $154 billion in investor capital under control, is familiar with hospitality and theme park operators. The firm nearly tripled its investment in SeaWorld Entertainment Inc. when it sold it after seven years in March 2017. It is also planning to buy Legoland operator Merlin Entertainments for $6.1 billion. Legoland said Wednesday it will open its newest and largest theme park in Goshen, N.Y., on July 4, 2020.

Blackstone had a busy September, entering into agreements with Colony Capital to buy its light industrial division for $5.9 billion and Global Logistic Properties to acquire its U.S. industrial assets valued at about $19 billion. Also in September, Blackstone Real Estate Partners Europe agreed to buy five hotels in the Greek Islands from the Louis Group for $197 million. That news came soon after Blackstone raised the largest-ever global real estate fund, closing on Blackstone Real Estate Partners IX at $20.5 billion.