LEGO owners to buy back LEGOLAND with help from private investors

The LEGO Group’s owners, along with private investment companies, are set to buy Merlin Entertainments from the current shareholders.

In 2005, the LEGO Group sold the company’s LEGOLAND theme parks to Blackstone Capital Partner when the Billund based company was in financial trouble. LEGOLAND became part of an attractions company, Merlin Entertainments, which the LEGO Group’s family owners – under KIRKBI A/S – has maintained 30% ownership of. Merlin Entertainments was listed as a public company in 2013.

Now, the LEGO Group’s owning family is aiming to bring the LEGOLAND brand back in house, which now includes theme parks around the world and dozens of LEGOLAND Discovery Centres across the USA and Europe. Blackstone, a private equity group, and the Canada Pension Plan Investment Board will be providing finance along with KIRKBI A/S to buy the whole of Merlin Entertainments, and delist the company – meaning it will return to private ownership.

The offer that has been made is 455 pence per share in cash, valuing Merlin at £4.77 billion. The new owners intend to run the company privately in order to invest in long-term growth, believing this is important to the company’s long term future rather than having to respond to share prices.

“As the long-term owner of the LEGO brand and as a strategic shareholder in Merlin since 2005, we have great pride and passion for this amazing company, its management team and its employees. With a shared understanding of the business and its culture, we believe that this group of investors has the unique collective resources necessary to equip Merlin, including the LEGOLAND Parks and LEGOLAND Discovery Centres, for their next phase of growth,” said Søren Thorup Sørensen, Chief Executive Officer, KIRKBI A/S. “We are committed to ensuring LEGOLAND and the other activities in Merlin reach their full potential, which we believe is best pursued under private ownership, in order to deliver fantastic experiences to visitors of all ages around the world.”

“We are pleased to partner with KIRKBI and CPPIB to acquire a business we know very well. We are prepared to commit the substantial resources required to support the long-term objectives of Merlin, which will require significant investment to ensure its long-term success,” said Joe Baratta, Global Head of Private Equity, Blackstone. “We believe we are uniquely placed through our Core private equity strategy to make this investment alongside our partners at KIRKBI and CPPIB. We look forward to backing Nick Varney and his strong management team in driving Merlin into the future.”

“Merlin has established itself as a globally diversified, world-class operator of themed attractions and entertainment. Its ability to partner with a number of leading global brands to deliver high-quality family entertainment has been key to Merlin’s success,” said Ryan Selwood, Managing Director, Head of Direct Private Equity, CPPIB. “Through close collaboration with our partners, we look forward to promoting the steady growth, long-term capitalisation and continued international expansion of this business, which aligns well with CPPIB’s long-horizon investment strategy.”

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