Invest in Shamu? SeaWorld plans IPO

You can soon own a piece of Shamu -- but considering how much money the orca owes, you may not want to.

Blackstone (BX), the private equity group that paid Anheuser-Busch InBev (BUD) $2.7 billion for SeaWorld's parks in late 2009, filed paperwork Thursday to take the unit public. The IPO is estimated to raise as much as $100 million for SeaWorld Entertainment, which will trade under the ticker symbol "SEAS."

SeaWorld didn't say how many shares would be available, when it planned to go public or the price range it was considering. Some of the money will be used to pay SeaWorld's $1.83 billion in debt, but that will barely make a dent.

Give Blackstone credit for turning SeaWorld's fortunes around. The amusement parks were bleeding money when Blackstone took over, losing $58 million just in December 2009, Bloomberg Businessweek reports. The parks were $45 million in the hole the next year. But SeaWorld then turned profitable, earning $19 million in 2011 and $86 million in the first nine months of 2012.

The company owns 11 theme parks under the SeaWorld, Busch Gardens and Aquatica names. It also owns the Discovery Cove marine park in Florida and the Sesame Place park in Pennsylvania.

SeaWorld's total revenue rose from $1.2 billion in 2010 to $1.33 billion in 2011. The company says that the overall U.S. theme park business has seen a 3% compounded annual growth rate since 2003, and generated about $11 billion in revenue last year.

Even though it's swimming in debt, SeaWorld was able to pay special dividends of $110 million and $500 million to its stockholders -- which mostly means Blackstone -- in 2011 and 2012, respectively. Actually, SeaWorld took on an additional $500 million in debt to fund that last dividend.

In fact, SeaWorld's debt has been a concern to some observers. Moody's ratings agency downgraded SeaWorld in March, saying "the relatively limited amount of debt reduction since Blackstone's December 2009 leveraged buyout of SeaWorld Parks reflect an aggressive use of cash and debt.

Blackstone will still retain control over SeaWorld after the IPO, so new shareholders shouldn't expect their voice to sway operations much.

So is SeaWorld a worthwhile investment? Perhaps, if the market performance of other theme-park stocks is any indication. Shares of Six Flags Entertainment (SIX) and Cedar Fair (FUN) have each risen about 45% in the last year. The economy may be shaky, but consumer spending on entertainment so far seems just fine.

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