The amusement park industry's bumpy ride this year took another twist as one of the nation's biggest park operators said it has reached a deal to be acquired by a private equity firm.
North America's third-largest chain, Ohio-based Cedar Fair LP, will turn over its 11 amusement parks, seven water parks and five hotels to Apollo Global Management for about $635 million in cash.
The deal announced late Wednesday tops off 12 months that have turned the industry upside down with declining attendance, private acquisitions and the bankruptcy of Six Flags Inc., the world's largest regional theme park company.
Cedar Fair's deal comes just two months after Anheuser-Busch InBev announced it would sell its 10 theme parks across the U.S., including the three SeaWorlds and two Busch Gardens, to private equity firm Blackstone Group for at least $2.3 billion.
"It all says we're seeing limited growth," said Dennis Spiegel, a theme-park consultant who is president of Cincinnati-based International Theme Park Services Inc. "We're still drawing and attracting a lot of people, but this does say we're a mature industry now."
Attendance and revenues at many big parks have flattened out in recent years and it's no longer a guarantee that opening an expensive roller coaster at a major theme park will bring in waves of new customers.
That made it tough for Cedar Fair and Six Flags to pay off huge debt that they accumulated on spending sprees for new parks.
Cedar Fair's chairman and chief executive, Dick Kinzel, said the industry's future is still bright, but it's not likely to match the growth seen in the 1990s when parks had huge revenues and spent millions on new roller coasters and thrill rides.
"I don't think it's peaked," he said. "People still like escaping and having a good time."
Cedar Fair transformed from a regional chain to an industry giant in 2006 with its $1.24 billion acquisition of Paramount Parks Inc.
The deal added five amusement parks to its lineup, including Kings Island near Cincinnati, but also gave Cedar Fair a heavy debt load that it could not escape.
Apollo now will assume Cedar Fair's $1.7 billion debt as long as holders of two-thirds of the company's shares approve the transaction.
Cedar Fair, based in Sandusky, already had made a number of moves in the past year to shore up its bottom line. It sold a large chunk of land next to Canada's Wonderland, its park outside Toronto, and the company cut cash distributions to unit holders.
It also put up for sale two of its amusement parks along with the site of a now-closed park near Cleveland, but no deals ever materialized.
None of that was enough, especially in the face of a weak economy.
"We never thought it was going to be as bad as it was," said Kinzel, who got his start supervising food stands in 1972 at the company's flagship park, Cedar Point in Sandusky, and became chief executive in 1986.
He said there were no regrets over the acquisition of the Paramount Parks and that Cedar Fair would have been fine if it weren't for economic downturn that has cut into attendance and spending. "The last thing I wanted to do is give up control of the company," he said.
Cedar Fair said attendance dropped by 1.2 million visitors during the first three quarters, and guests who did visit the parks spent less money.
Other amusement parks tried similar tactics. The Walt Disney Co. began offering numerous discounts and specials to keep visitors coming. Six Flags posted a second-quarter loss of $121 million, noting that groups, companies, schools and other organizations cut out trips.