Parques Reunidos has reached an agreement with Tanjong PLC to acquire the German indoor water park Tropical Islands for a total amount of €226 MM. This is the largest single-park acquisition in Parques Reunidos’ history. Tropical Islands is the world’s largest indoor water park and rainforest covering an area of more than 600 has. of land. The Park offers a combination of water park and other leisure activities with different formats of lodging facilities. The indoor setting combined with the themed accommodation it offers, allows the Park to open year-round. Tropical Island is located in a highly attractive growth market and in a catchment area with limited competition: at approximately 60 km south from Berlin and close to the cities of Dresden, Leipzig as well as to Poland and the Czech Republic.
Tropical Islands welcomes ca. 1.3 million visitors p.a. generating revenues and EBITDA of ca. €71 million and ca. €20 million, respectively. The Park combines a truly one-of-a-kind leisure and accommodation offering with strong brand awareness. Tropical Islands is divided into three main areas. “The Dome” is a 7 has. indoor area at the core of Tropical Islands, with a strong tropical theme and both leisure attractions and accommodation facilities. This area includes “Tropical Sea”, “Magical Lagoon”, “Rainforest”, “Waterslides”, “Sandy Beach” and “Sauna & Spa”. The second area allows additional accommodation for mobile homes, camping and tepees outside The Dome; lastly, “Amazonia” is a 35,000 sqm outdoor water park with heated pools operating year-round.
Tropical Islands, the first indoor water park in the Group, represents a highly strategic acquisition. As an indoor park it operates year-round, extending the season in Europe and contributing to hedge the Group against external conditions. The park is a trophy asset, with unique product offering and brand awareness that currently attract 1.3 million visitors and with potential to become a destination park in Central Europe.
Parques Reunidos has already identified multiple areas where it will implement its best practices and materialize operational improvements in order to further increase profitability levels. Additional expansion opportunities will come from the development of unused land included in the transaction.
The acquisition will be financed with an additional tranche to the Group’s existing syndicated credit facilities with similar conditions to the existing financing. The transaction is expected to be earnings accretive from the year one.
The deal is yet pending clearance from the German Competition Authorities and other customary approvals, and the transaction is expected to close by February 2019. Nomura International Plc acted as exclusive financial advisor to Parques Reunidos in this transaction.
“Germany is a strategic market for Parques Reunidos. As well as representing a truly unique opportunity in itself, Tropical Islands also reinforces our market positioning in the country, where together with Movie Park and Belantis we will reach 3 million visitors. The indoor setting of the park will allow us to extend the season of our European business and provides an attractive source of resilience against external conditions. We expect to create further value for our shareholders by implementing Parques Reunidos best practices to the operations of Tropical Islands and through identified expansion projects on the available land that this acquisition includes”, explained Richard Golding, Chairman of Parques Reunidos.
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