Untitled Document

Volume 1, No. 8. May 18, 2001

A wave of acquisition
News this week that Cedar Fair, L.P., has entered an agreement to purchase yet another Southern California waterpark, Oasis Water Resort in Palm Springs, came fast on the heels of the amusement park company's shocking announcement last week that it planned to purchase Michigan's Adventure Amusement Park in Muskegon, Michigan.

More than timing link these two proposed acquisitions, both of which Cedar Fair said it plans to finalize by the end of this month.
Neither park was on the market.

"They came to me," said Roger Jourden, who with his wife owns Michigan's Adventure. Similarly, Terry Durst, owner of Oasis, was quoted in The Desert Sun saying "I love the water park. It wasn't for sale. They contacted me."

Figures were not disclosed for either transaction, but both sellers indicated Cedar Fair is paying a pretty penny. "It was a very profitable deal for everyone involved," The Desert Sun quoted Durst. "They had to make me happy because I didn't want to sell it."

Jourden sounded like he's still willing to hold out. He said if the deal is not closed by May 30, he'll table it. "If I'm going to operate beyond May 30, I'm going to stay here. We've owned this for 33 years and built it to what it is today. There are lot of memories here, the kids grew up here, our home was in the park. It's hard to sell." Furthermore, the family is split, he said: "There is a difference of opinion between myself and my children about whether what I'm doing is right or wrong." Children Camille and Roger want the family to keep the park; but the elder Jourden said, "I want the freedom from the responsibility of owning the park."

Whatever the bottom-line motives of the sellers, Cedar Fair is showing an aggressive bent. Coming off a financially successful year despite sluggish attendance at some of its parks last year, "The climate is definitely good to grow the company," said Brian Witherow, corporate director of investor relations. "We do want to continue to grow the company externally through acquisitions. (Michigan's Adventures) is one of a dozen or so parks we have on our radar screen that has been somewhere along the way popping up as an acquisition possibility."

The Michigan park, with its three major roller coasters including the globally popular Shivering Timbers, saw attendance last year grow to more than 450,000, continuing a steady increase of the past few years. It's draw has expanded across Michigan, into Indiana and Ohio, a territory abutting, if not overlapping, that of Cedar Point's. Witherow said Cedar Fair does not look upon Michigan's Adventures as direct competition to the company's Cedar Point in Sandusky, Ohio, though it has "a strong presence in its market. It's done very well for itself being in the backyard of Cedar Point." He also said the company has never targeted a park for geographical reasons.

However, Cedar Fair is becoming the dominant player in the Southern California waterpark scene. Oasis would be the company's third such property in the region after last year's purchase of Whitewater Canyon in Chula Vista near San Diego (renamed Knott's Soak City USA) and its opening of Knott's Soak City USA at Knott's Berry Farm. The 16-acre Oasis Water Park, two hours west of Los Angeles, has 13 water slides, a 600-foot lazy river and a children's activity area and boasts the largest wave pool in California.

"We've been pleased with the success we've had with the waterparks we have out there under the Knott's Soak City name," Witherow said. "We think the same kind of synergies that existed with the San Diego property will exist for Palm Springs." Such synergies include absorbing marketing and sales duties into the Knott's Berry Farm operations. Cedar Fair plans no changes for Oasis this year, which has already begun its season, but Witherow predicted that by next year the park will be branded under the Knott's name.

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