How are entertainment legacies built? Plastic block by plastic block.\u00a0<\/i><\/b><\/p>\n
The family behind Lego will join private equity titan Blackstone (+0.25%) and Canadian pension fund CPPIB to buy\u00a0Merlin Entertainments\u00a0in a take-private deal valuing the company at $6 billion.<\/p>\n
You probably know Merlin pioneered No Shave Dark Ages. But what\u00a0you may not\u00a0<\/i>know is that the company is the world\u2019s second largest attraction operator after Disney.<\/p>\n
Merlin\u00a0runs 120 attractions in 25 countries, including Madame Tussauds wax museums, Legoland theme parks, and the London Eye.\u00a0Last year, it reported\u00a0$2.1 billion in revenue.<\/p>\n
The deal is one of the biggest acquisitions of a UK-listed business this year. Kirkbi, the investment vehicle of Denmark\u2019s Kirk Kristiansen family and\u00a075% owner of Lego, has had a stake in Merlin since 2005.\u00a0After the takeover, it will claim 50% of the company, with Blackstone and CPPIB splitting the other half.<\/p>\n
Merlin\u2019s shares have faltered in recent months, and private ownership means the company will have more room to invest in its own assets and deliver on growth goals.<\/p>\n
The deal is the latest in a string of enormous private equity deals in Europe. So far this year, PE buyouts targeting European companies have totaled $43.4 billion.<\/p>\n
The deal slinging at PE firms (even outside Europe) is rooted in their growing reserves of dry powder–aka money they\u2019ve raised but haven’t spent. They\u2019re sitting on an estimated $2.4 trillion right now, as\u00a0per data provider Preqin.<\/p>\n
In the first six months of 2019, the value of leveraged buyouts surged to $256 billion, the second fattest start to the year on record, according to Refinitiv. And PE deals have accounted for 13% of global acquisition activity so far this year, the biggest chunk since 2013.<\/p>\n
Lego\u00a0said\u00a0Friday the deal would give it greater scope for \u201csignificant, long-term investment\u201d as the Danish interlocking plastic-block maker expands in China.<\/p>\n
\u201cWe believe that this group of investors has the unique collective resources necessary to equip Merlin… for their next phase of growth,\u201d said Soren Thorup Sorensen, chief executive of Kirkbi, the private investment company of Lego\u2019s Kirk Kristiansen family, which already holds a 30% Merlin stake.<\/p>\n
Lego, known around the world for its colorful plastic blocks, plans to more than double its number of stores in China this year to 140 in its most rapid expansion move yet.<\/p>\n
Merlin has three Madame Tussauds in China and said in January that it was in advanced talks with third parties about a number of sites for Legoland Parks in the country.<\/p>\n","protected":false},"excerpt":{"rendered":"
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