Six of the seven parks will be consolidated into a new regional park chain called Enchanted Parks
The Valuation
$331 million for parks generating $45 million in Adjusted EBITDA works out to roughly a 7.3x multiple. That’s mid-range for regional park transactions, which typically fall in the 4x–8x EBITDA range, depending on the assets’ quality and growth profile.
For context, Cedar Fair paid $1.24 billion for the five Paramount Parks in 2006 (a deal widely estimated at approximately 9x EBITDA), but those were large growth parks in lucrative markets: Kings Island, Canada’s Wonderland, Kings Dominion, Carowinds, and Great America. The seven parks in this deal are part of the lower-performing cohort that Six Flags has described across multiple earnings calls as generating a disproportionately small share of the company’s total revenue and EBITDA.
There are two ways to read the price. You could argue that Six Flags received a reasonable return on assets that were dragging down the portfolio. You could also argue that a limited buyer pool meant they had to take what they could get. Six Flags says net proceeds are expected to be “slightly beneficial” to the company’s leverage ratio; that tells you something about the debt load.
EPR Properties Is Not New Here
EPR isn’t a new name in the Six Flags story. Since 2017, they’ve been the landlord at Darien Lake, Frontier City, and four standalone Hurricane Harbor water parks (Oklahoma City, Houston, Phoenix, and Concord, California). Six Flags has been the tenant on those properties, paying rent to EPR, operating the parks, and licensing the Six Flags brand.
This new deal is a different arrangement and, as I explain below, could signal further expansions. This time, EPR is buying the real estate and full operating assets. EPR also already has a working relationship with Enchanted Parks; they’ve partnered on Diggerland USA in New Jersey and Water Safari Resort in New York.
Enchanted Parks — Who They Are
Six Flags St. Louis To Become Mid-America by Enchanted Parks
Will Six Flags Sell More Parks?
EPR already owns properties where Six Flags is the current tenant — Darien Lake, Frontier City, and the four Hurricane Harbor parks. Six Flags has been clear about trimming assets, and those lease parks are part of the same underperforming cohort. If Six Flags exits those leases, EPR would need a new operator, and Enchanted Parks is the obvious candidate. That could bring the Enchanted Parks portfolio to roughly eleven properties.
The parks in this deal are far enough from the remaining Six Flags properties that direct competition between the two isn’t really the dynamic. The more relevant competitive picture varies by market. In Missouri, for example, the primary comparison is Herschend Family Entertainment, which now operates 49 properties after completing its acquisition of Palace Entertainment’s U.S. attractions from Parques Reunidos last year. Herschend’s flagship Silver Dollar City in Branson sits about 280 miles from Eureka. Enchanted Parks will also operate Worlds of Fun in Kansas City, roughly 190 miles from Branson. Both operators will be running regional parks with similar ride counts in overlapping drive markets.
Six Flags needed to do this — the debt required it, and these parks were underperforming relative to the rest of the portfolio. So, yes, I think it’s likely Six Flags will sell additional properties to manage debt, and likely, they will propel Enchanted Parks into a solid position with roughly 11 properties. Enchanted Parks has industry veterans, a 40-year lease, and an existing relationship with the landlord. Whether they can turn these parks around to compete with Herschend and become a viable regional park chain will be worth watching.
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Is Six Flags Preparing to Sell More Parks?
