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StarParks

StarParks

Invested
April 2004

Exited
May 2010

Return
2.3x, 35% IRR

Sector:
Leisure and retail

Headquarters:
Dusseldorf

Region:
Germany

Business:
Theme park operator

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Business at time of investment

Palamon acquired the European division of Six Flags, the world’s largest regional theme park operator.  The division consisted of seven large format sites located in Germany, Holland, Belgium and France.  The group generated revenue of €120 million and EBITDA of €26 million.

Investment rationale

Star Parks’ well-located and well-invested asset base would allow capital spending to be concentrated on increasing attendance and profitability of the parks through improving the “family entertainment” nature of the experience.  The parks were well-positioned to attract more families, thereby increasing attendance and yields.  Particular upside potential was identified in the German park.

Value creation

  • Strategic shift: Implemented plan to rebrand and focus the parks on family entertainment
  • Strengthened management: Developed a strong management team behind a new CEO, including a new Marketing Director, Retail Director and general managers
  • Growth financing: Refinanced the company in 2006 with a €135 million facility provided by Dresdner Kleinwort Wasserstein to provide growth capital
  • Retained Movie Park Germany:  Exploited trend for industry consolidation with the sale of six parks for a 2.4x return while retaining Movie Parks Germany, debt free
  • Invested in accelerated growth: Developed a major capital investment programme during 2007 and 2008, including 8 new rides for remaining asset Movie Park Germany

Company at Exit

With Palamon’s support, the Star Park’s management team embarked on an aggressive three year programme to re-focus the Park to appeal to a broader family audience.  The result was a 40% increase in attendance, an almost 50% increase in revenue and a seven-fold increase in profitability.

Result

Following a period of profit growth, six of the seven leisure parks were sold to Compagnie des Alp in 2006 resulting in a 2.4x return on invested capital for Palamon.

Movie Park Germany was sold to Parques Reunidos, providing an overall return on the Star Parks Group of 2.3x times capital invested.


StarParks


“It has been an exciting time working in partnership with Palamon to implement a family-oriented theme park strategy and very rewarding to see Movie Park Germany come into its own.  The Star Parks team is very proud of our accomplishment."
Bill Muirhead, CEO of Star Parks