CPPIB, Blackstone to buy global entertainments business

Investment managers join with KIRKBI to acquire LegoLand, Tussauds owner

CPPIB, Blackstone to buy global entertainments business
Steve Randall

A consortium including the Canada Pension Plan Investment Board and investment managers Blackstone and KIRKBI Invest are acquiring one of the world’s leading entertainment resort companies.

The firms will acquire Merlin plc, the UK-based owner of the LegoLand resorts which include locations in New York, California, and Japan and the LegoLand Discovery Centre in Toronto; the Madame Tussauds waxworks; the London Eye; and Sea Life centres.

The offer, for which the consortium have received irrevocable commitments from ValueAct Capital and Merlin’s directors, will be made by a newly incorporated company which has been formed on behalf of the members of the Consortium, with each of KIRKBI and the Blackstone/CPPIB group owning 50% upon completion.

KIRKBI Invest’s parent is the ultimate owner of the Lego brand and along with Blackstone the firms have a long history with Merlin; their private equity funds jointly controlled the firm in the 8 years prior to its public listing in 2013.

"We are pleased to partner with KIRKBI and CPPIB to acquire a business we know very well,” said Joe Baratta, Global Head of Private Equity, Blackstone. “We are prepared to commit the substantial resources required to support the long-term objectives of Merlin, which will require significant investment to ensure its long-term success."

The plan is for Merlin to de-list from the London Stock Exchange following the completion of the acquisition.

Aligns with CPPIB’s long-term strategy
"Merlin has established itself as a globally diversified, world-class operator of themed attractions and entertainment,” said Ryan Selwood, Managing Director, Head of Direct Private Equity, CPPIB. “Its ability to partner with a number of leading global brands to deliver high-quality family entertainment has been key to Merlin's success. Through close collaboration with our partners, we look forward to promoting the steady growth, long-term capitalisation and continued international expansion of this business, which aligns well with CPPIB's long-horizon investment strategy."

Image credit: Merlin Entertainments plc.