The IPO had an encouraging start on Thursday evening. The price of Sea World is kept at $27 per share, according to a source familiar with the matter. At this price, the total funds raised will be $702 million and the value of the company will be worth $2.5 billion.
Blackstone who acquired SeaWorld in 2009 for $2.3 billion, will release the IPO but will keep control of the company with itself. Blackstone invested about $1 billion of equity in the deal and earned dividends of $500 million last year and $110.1 million in the year before that.
SeaWorld Entertainment Inc (NYSE:SEAS), which is a theme park, was owned previously by the giant beer maker Anheuser-Busch InBev NV (NYSE:BUD) (EBR:ABI). Sea World has earned a profit from the Live shows, thrill rides and many other games and events. The company earned $77.4 million last year, an increase of almost four times than the earnings of 2011. The company has decided upon paying the dividend of 20 cents a share, beginning from this quarter.
However, the business model of Sea World remains a risk in recession and when people are spending less. The company earns a major portion of its revenue from the entries in its theme park and part from the sales of food and merchandise. The average ticket price of Sea World is more than its peers, Six Flags and Cedar Fair.
“It’s more of a destination park strategy,” Mr. Corydon an analyst with B. Riley & Company said. “The Orlando and Southern California parks are known the world over and draw guests from out of town.”
SeaWorld Entertainment Inc (NYSE:SEAS)’s image was battered majorly when a trainer was killed by an Orca Whale in front of the public present there in 2010. The documentary “Blackfish”, which is based on the incident, is set to release in the summers. The company has made some amendments in its security measures but is in a legal battle in court in the context of killing.
There are reports that The Blackstone Group L.P. (NYSE:BX) turned down many takeover offers for SeaWorld Entertainment Inc (NYSE:SEAS), believing that the public market would offer better returns.