Six Flags is buying out the rest of SFoG it doesn’t already own. Price is currently estimated to be 332.6 Million, but can change upon close.
SEC Filing
SEC Filing
News Six Flags Proposes $332.6 Million Over Georgia Co-Owner Buy-Out
- Thread starter Gavin
- Start date
Very curious as to why they'd drop that much money on something that wasn't "necessary". The chain already in a lot of debt and I can't imagine they were losing out that much of SFoG's profits with their current arrangement.
Presumably they see enormous growth potential for SFoG and see the value of their co-owners shares as being massively undervalued currently. Way more advantageous to take on the debt now and buy them out before the value skyrockets with planned improvements and expansion.
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They had until Dec 31 to exercise this option for Over Georgia and White Water Atlanta. The option for Over Texas will need to be exercised by Dec 31, 2025
From the last earnings call:
"Thomas Yeh
Okay. That's helpful. And then just a clarification on the unlevered free cash flow outlook. You have these partnership puts coming up on the Six Flags side. Is your sense that, that's still a good ROI to deploy capital into to buy that out? Or -- and just given your other capital priorities, I just wanted an update on how you think about that?
And should we assume that the adjusted EBITDA for your 2027 guidance is essentially the same as your modified EBITDA by then, if we're thinking about the building blocks there?
Richard Zimmerman
Yes, Thomas, it's Richard. Dallas and Atlanta, the original partnership parks are a tremendous market. They're great assets in tremendous markets, tremendous franchises. We absolutely believe that there is a place in our portfolio and we'll work towards making sure that we exercise those at the appropriate time. But our -- as we look at where there's opportunity, Dallas Fast growing Atlanta over 6 million, 7 million and growing, both those markets are extremely attractive.
So it's really difficult to find M&A. I think the partnership parks is built in M&A. But in terms of the specifics around modified margin, I'll throw that one over to Brian.
Brian Witherow
Yes. In terms of what we've assumed in the -- in the modeling, Thomas, is that the modified and adjusted would be the same from that perspective."
From the last earnings call:
"Thomas Yeh
Okay. That's helpful. And then just a clarification on the unlevered free cash flow outlook. You have these partnership puts coming up on the Six Flags side. Is your sense that, that's still a good ROI to deploy capital into to buy that out? Or -- and just given your other capital priorities, I just wanted an update on how you think about that?
And should we assume that the adjusted EBITDA for your 2027 guidance is essentially the same as your modified EBITDA by then, if we're thinking about the building blocks there?
Richard Zimmerman
Yes, Thomas, it's Richard. Dallas and Atlanta, the original partnership parks are a tremendous market. They're great assets in tremendous markets, tremendous franchises. We absolutely believe that there is a place in our portfolio and we'll work towards making sure that we exercise those at the appropriate time. But our -- as we look at where there's opportunity, Dallas Fast growing Atlanta over 6 million, 7 million and growing, both those markets are extremely attractive.
So it's really difficult to find M&A. I think the partnership parks is built in M&A. But in terms of the specifics around modified margin, I'll throw that one over to Brian.
Brian Witherow
Yes. In terms of what we've assumed in the -- in the modeling, Thomas, is that the modified and adjusted would be the same from that perspective."
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paintervision
Coasters: 653 🎢
More to the point, SFOT/SFOG haven't seen a ton of large-scale investments in recent years. They're in growing metro areas and have long seasons with fair weather (aside from flooding issues). I can see taking some pages out of the Carowinds or Knotts playbook for improving these parks and really turning them into larger draws than they already are.
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Is this one of those situations where they are buying this out and claiming it as CAPEX for tax reasons?
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Just a little clarifying note here: Six Flags isn't "in debt" in the way that we'd describe a person to be in debt. FUN has debt, but so does virtually every healthy, publicly traded company. For example:
FUN (Six Flags): $4.8 billion debt
PRKS (United): $2.5 billion debt
DIS (Disney): $48.7 billion debt
CMCSA (Universal): $101.4 billion debt
Debt is a normal and good thing for companies, when managed well. Check out this Harvard Business Review explanation to learn more if you're curious. I only mention it because I've seen it stated over and over in enthusiast circles that Six Flags is "in debt" and therefore its financials must be bad, so I think it's important to make clear that its debt alone really says nothing about the financial performance of the company.