Europeans buy landmark park, other properties; sale estimated at $200 million
December 12, 2007 10:00 AM
Riders take a spin on Kennywood's Aero 360.
By Ann Belser Pittsburgh Post-Gazette
Kennywood Park, the summertime mecca for generations of Pittsburghers in search of thrill rides, arcade games, old-fashioned family fun and gooey cheese fries, was sold yesterday to a Spanish company.
Kennywood Entertainment, a West Mifflin-based enterprise since 1898, will be taken over by Parques Reunidos of Madrid, which plans to leave day-to-day operation of the park in local hands.
The descendants of F.W. Henninger and A.S. McSwigan, who acquired the park from Pittsburgh Railway Co. in 1906, had been approached by amusement companies in the past about selling the local icon, but have refused. When Premiere Parks, an Oklahoma-based chain, made a lucrative bid for Kennywood in 1997, the company wouldn't sell because the buyer would have significantly changed the park.
What is different this time is assurances of maintaining the amusement park's image.
There were factors that made the park attractive to the Spanish company, said Kennywood spokeswoman Mary Lou Rosemeyer, citing the current exchange rate that has made the euro stronger than the dollar and the fact that the privately held amusement park company has very little debt and makes money.
Kennywood Entertainment would not disclose the purchase price, but Jim Futrell, an amusement park historian, estimated it would top $200 million based on previous public sales, including Cedar Fair's purchase of Geauga Lake in 2004 for $145 million.
The companies expect to close on the deal in March, which will include all of the Kennywood Entertainment holdings: Kennywood Park in West Mifflin, Idlewild Park & SoakZone in Ligonier, Sandcastle Waterpark in West Homestead, Lake Compounce theme park in Bristol, Conn., and Story Land in Glen, N.H.
Parques Reunidos is the third-largest European operator of amusement parks and entered the U.S. market this year by purchasing water parks. It was a public company until December 2003, when it was purchased by Advent International, a private equity company. A British private equity firm, Candover Investments, acquired the company in January for $1.22 billion.
This past summer, the company, which already owned 28 water parks and family entertainment centers in Europe, bought Palace Entertainment Group, owner of 33 water parks including Big Kahuna's in Destin, Fla.; Mountain Creek Waterpark in Vernon, N.J.; and three Raging Waters Waterparks in California. Parques Reunidos spent about $330 million on that deal.
Kennywood is Parques Reunidos' first large amusement park in the United States, although overseas it owns Mirabilandia, the second-largest amusement park in Italy, Bonbonland near Copenhagen and Bobbejaanland in Belgium.
Kennywood employees were told of the pending sale yesterday morning at a meeting at the Kennywood-owned Bradley House of Catering in Baldwin Borough, Ms. Rosemeyer said. The company reportedly has 2,200 full-time-equivalent employees.
Overall, this is not a strong time for the amusement park industry. Stock in companies that own amusement parks, including Six Flags and Cedar Fair, which owns Cedar Point in Ohio and Knotts Berry Farm in California, are at a five-year low.
Meanwhile, Kennywood has been poised for a major expansion. In March 2006, the company bought 43 acres of adjacent land in Duquesne for $2.6 million. It was planning to build a hotel and indoor water park on the site of the former Kmart shopping plaza, across Route 837 from the main park and on the same side of the road as the parking lots.
Other plans included a new roller coaster that would plunge down the hillside into land that is currently a rail yard, located in part under the Kennywood Bridge from Duquesne to West Mifflin. At the time of the purchase, Peter McAneny, Kennywood's president, said the company would wait for completion of the Mon-Fayette Expressway, which had plans for an exit a few hundred yards from the amusement park, before building the new attractions.
Ms. Rosemeyer said local issues that Kennywood Entertainment is involved in, such as finding a way to get the bike trail connecting Pittsburgh and Washington, D.C., through Sandcastle and a lawsuit against West Mifflin over the borough's 5 percent amusement tax, would be left to local administrators of the park to work out.
The park opened in 1898 as a picnic ground with a carousel at the end of a trolley line. F.W. Henninger and Andrew McSwigan bought the park in 1906. The two families are now in the fourth and fifth generations of joint ownership.
As the business grew, the company tapped nonfamily members for top management jobs, including Mr. McAneny, who will remain with the company to oversee day-to-day business.