Merlin Entertainments

***Merlin Entertainments Ltd*** is a British-based entertainment company headquartered in Poole, Dorset (England). It was listed on the London Stock Exchange until it was acquired by a consortium of Kirkbi (the investment arm of the Christiansen family, which controls The Lego Group), CPP Investment Board and The Blackstone Group in November 2019.

## 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 2003.

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. Blackstone negotiated to buy control of Legoland for about £250 million and then merged it with Merlin.

Under Blackstone, Merlin went on to buy Gardaland, an Italian amusement park, and then The Tussauds Group, owner of the Alton Towers and the Madame Tussauds wax museums, for £1 billion.

The company owns a grand total of 623 attractions. Merlin Entertainments and Tussauds together attracted 30 million visitors during 2007 and employ more than 13,000 staff.

After the Tussauds acquisition, Dubai International Capital held 20% of Merlin Entertainment.

The buyout of Tussauds was completed on 22 May 2007. The Tussauds Group as a separate entity has ceased to exist, with control of its attractions, including Madame Tussauds, The London Eye, Chessington World of Adventures, Alton Towers, Thorpe Park and Heide Park among others, passing 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. Although the attractions are owned by Leslau, they continue to be operated by Merlin, leasing each back on a renewable 35-year lease. Chessington World of Adventures (the fifth Tussaud's attraction) was not included in the deal.

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.

As of 2007, negotiations reopened into the repurchase of Spain's PortAventura resort, which was built by Tussauds in 1994-5 and operated until 1998, when it was sold to Universal Studios. It has since been resold to Spanish banking group La Caixa.

On January 15, 2010, Merlin Entertainments bought the closed Winter Haven, Florida-based theme park, Cypress Gardens (now Legoland Florida).

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, 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 -- 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.

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. On 3 March 2011, the deal was finalised. 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, Hotham Alpine Resort, Otway Fly, Illawarra Fly, Busan Aquarium and Siam Ocean World. The attractions will eventually be refurbished to match Merlin Entertainments' brands.

### Legoland

When the Legoland theme parks came up for sale, Varney wanted to buy it but Hermes did not want to invest more capital. After the sale of Merlin to Blackstone Group, the company negotiated to buy control of Legoland for about £250 million in 2005, then merged it with Merlin. As part of the deal, Kirkbi A/S, the investment arm of LEGO owners, took a share in Merlin Entertainments.

### Tussauds

In May 2007 Blackstone purchased The Tussauds Group, owner of the Madame Tussauds celebrity wax attractions, for US$1.9 billion; this company was merged with Merlin and has since been managed by Merlin. After the Tussauds acquisition, Dubai International Capital, the previous owner, received a 20% stake in the combined entity as well as £1.03bn in cash.

On 17 July 2007, as part of the financing for the Tussauds deal, the freeholds of Alton Towers, Thorpe Park, Warwick Castle and Madame Tussauds were sold to private investor Nick Leslau and his investment firm Prestbury, with a subsequent leaseback agreement. Although the attraction sites are owned by Leslau, they are operated by Merlin based on a renewable 35-year lease.

### Florida

On 15 January 2010, Merlin Entertainments bought Cypress Gardens, a defunct theme park in Winter Haven, Florida. It was reopened as Legoland Florida theme park.

Reports in early October 2017 indicated that Merlin Entertainments was considering a takeover of Sea World in Orlando but on 11 October, the company said it was no longer involved in such discussions.

### Australia and New Zealand

In late 2010, it was announced that Merlin would purchase approximately A$116 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. On 3 March 2011, the deal was finalised. 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.

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 the unemployed at a Centrelink office in central Sydney. Deposed by the Australian Labour 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 political leader of Australia.

### Listing

Merlin had planned to go public in the early 2000's, 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. Kirkby, 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 – 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.

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.

In June 2019 the company's board agreed to recommend a takeover offer of £4.8 billion from Kirkbi, CPP Investment Board and The Blackstone Group. The takeover was approved by the high court in November 2019.

### eOne's multi-territory partnership with Merlin

On 5 December 2019, Entertainment One announced a new multi-territory partnership with Merlin that will open an interactive *PJ Masks* nautical-themed trail throughout the company's Sea Life aquariums worldwide starting February 2020.

Further tying into the collaboration between Merlin and eOne, select episodes of *PJ Masks* season 4 will feature underwater adventures.