A recent noteworthy article by the Financial Times indicates that the Blackstone purchase of SeaWorld is a marked indicator that the world’s largest private equity firm has now turned optimistic on the economy and the worst is behind us. More specifically, and as the prestigious publication notes, Blackstone is selling assets in other areas to focus on industries and lines of business that could improve significantly in the coming years. This would certainly include theme park attendance, as indicated by its accumulation of $2 billion in assets in this area. Click here for the Blackstone Asset Group’s corporate website.
Why is this noteworthy? This is an important indicator because Blackstone has been traditionally very good as a market barometer, especially when picking companies in improving industries.
All sources acknowledge that Blackstone has been tops at exploiting opportunities and picking market winners before they become apparent. Some indicate that the roughly 2x sales purchae price was very cheap, and that it was simply a “fire sale” purchase. We believe that this purchase might be at a sweet spot – low valuation metrics and at a time when business conditions are set to turn up noticeably for the theme parks. The latter would not only be good for Blackstone, it would also be good for the local economy.
Improved amusement park attendance would certainly bolster occupancy at a time when Orlando hotels and resorts have been struggling. Peak booking periods tend to come around spring break / Easter and a little good news is needed to restore confidence.
Some of the best resorts in the Orlando area are running enticing holiday specials to kick start business moving into 2010. This will hopefully be the beginning of an improved business cycle, and one that the Blackstone Group has presciently predicted by its actions.
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