Blackstone Merlin Essay

1357 Words6 Pages
What actions has Blackstone taken to create value in this investment? Blackstone’s proven ability to generate alpha through theme park investments was recognized in its US investments in Six Flags and Universal Studios Escape. Leveraging this knowledge base, the firm saw Merlin as a viable opportunity to take this experience base abroad and capitalize on consolidation of the European theme park and attraction industry (lagging the consolidation that took place in the U.S). Blackstone found ways to create value through several ways: * Strong management team Blackstone recognized the value that having a strong management team in place can create. The CEO of Merlin, Nick Varnay, was passionate for the business and had met or exceeded his numbers for the past five years. Varnay also shared the same vision with Baratta that the European attractions and theme-park sector will enter a period of consolidation. Merlin is in a prime position to take advantage of this trend through its experience in acquiring businesses. Surprisingly, Nick advocated for a management incentive package that spread down the organization while taking only a small percentage for himself, further supporting the alignment of management’s and Blackstone’s interests. * Consolidation of theme parks and the benefit of Blackstone’s brand name Before closing the Merlin acquisition, Baratta and Varney had identified a number of specific opportunities, with LEGOLAND as the top priority and most likely for sale. LEGOLAND fit in well with Merlin’s core values of education-based entertainment targeting families with young children, and just experienced the worst financial loss in its 73-year history due to the falling dollar, competition from inexpensive Chinese toys, and a trend towards electronic toys. Baratta was able to leverage the Blackstone brand name to help win the competitive bid for

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