California’s Great America Amusement Park to Trade for $70M
- Sep 20, 2011
September 20, 2011
By Barbra Murray, Contributing Editor
Cedar Fair, owner of California’s Great America in Santa Clara, Calif., has signed a deal to sell the amusement park to JMA Ventures L.L.C. in an all-cash transaction. The active property owner will pocket $70 million on the deal.
Located approximately 45 miles south of San Francisco, California’s Great America became part of Cedar Fair’s portfolio in 2006 when the company acquired Paramount Parks from CBS Corp. for just over $1.2 billion in cash. Today, the property carries the distinction of being the leading amusement park in Northern California.
As Richard Kinzel, CEO of Cedar Fair, said during the company’s second quarter earnings conference call in August, Cedar Fair’s amusement parks in the western region performed the strongest of those in its national portfolio, reporting a quarter-over-quarter increase in revenues of approximately 10 percent. Despite the successes in the region, the company believed the timing was right for the disposition of California’s Great America and it received an offer it couldn’t refuse.
“Our decision to divest of our California’s Great America park was not an easy one,” Kinzel noted in a prepared statement. “This is a quality park that has terrific employees and serves a strong market. That being said, as part of our regular comprehensive review of our portfolio of parks, we determined that divesting a smaller park like California’s Great America at an attractive market value created a compelling business opportunity that we couldn’t pass up.”
The amusement park market in the U.S. certainly did not escape the ravages of the economic downturn, but now, all signs point to a recovery. “The 2010 TEA/AECOM Theme Index reveals an average attendance increase of 1.8 percent in North American parks, with many sectors at or close to pre-recession levels,” John Robinett, senior vice president, economics, with global professional technical and management support services provider AECOM, contended in the annual report released by the firm in conjunction with the Themed Entertainment Association. “The major players saw mixed results, but the trend was generally positive. Both residents and tourists are coming back to the parks.”
The closing of the sale of California’s Great America is on track to occur in the fourth quarter of this year.