3RD UPDATE: AB InBev To Sell Theme Parks For Up To $2.7 Billion
October 07 2009 - 6:51PM
Dow Jones News
Belgian brewer Anheuser-Busch InBev (BUD, ABI.BT) Wednesday said
it will sell its theme parks business to private-equity firm
Blackstone Group (BX) for up to $2.7 billion.
The deal will help AB InBev pay down the $45 billion in debt it
took on to buy Anheuser Busch last year and is a sign that banks
are prepared to finance risky takeovers.
It has been long rumored that AB InBev wanted to sell the theme
parks, which were owned by Anheuser, but had held off because the
collapse of credit markets made private equity buyers such as
Blackstone and even corporate buyers unable to raise financing for
deals.
AB InBev will receive $2.3 billion in cash and the right to
participate in the first $400 million of Blackstone's return on
investment. The subsidiary, Busch Entertainment Corporation,
operates 10 entertainment parks in the U.S., including three
SeaWorld parks.
The financing backing Blackstone's acquisition totals $1.5
billion and includes a $950 million senior secured term loan, as
well as a $450 million mezzanine facility, according to people
familiar with the deal. In addition, there is also a $100 million
revolving credit facility and a $1 billion slug of equity, the
people added.
Bank of America-Merrill Lynch, Barclays Capital, Deutsche Bank,
Goldman Sachs Loan Partners and Mizuho Corporate Bank are providing
the senior secured loan, one of the people said.
The mezzanine financing is being provided by Goldman Sachs
Mezzanine Partners and Blackstone unit GSO Capital Partners, this
person said.
Blackstone had no official comment.
AB InBev executives have planned to sell at least $7 billion in
assets following the Anheuser deal, and the theme parks sale
roughly achieves that target after AB InBev sold its South Korean
division and a few other businesses. Busch Entertainment was seen
as a logical candidate for sale because AB InBev wants to focus on
selling beer.
"Busch Entertainment Corporation is a high performing asset with
a world-class management team, but not a core business for
Anheuser-Busch InBev," said AB InBev chief executive Carlos Brito
in a statement.
The sales price reflects the fact that the U.S. economy is in
bad shape but potentially starting to rebound, said John Gerner, a
consultant to theme park companies.
"They paid a very comfortable multiple of what we see the parks'
financial performance to be," Gerner said.
J.P. Morgan (JPM) and Lazard Ltd. (LAZ) advised AB InBev on the
deal.
Company Web site: www.ab-inbev.com/
-By Matthew Dalton, Dow Jones Newswires; +32 2 741 1487;
matthew.dalton@dowjones.com
(Kate Haywood and Madeleine Lim in New York contributed to this
article.)