- Six Flags may sell or close underperforming amusement parks as it works to streamline its portfolio and reduce net leverage.
- As part of its new financial strategy, the company aims for $800M in annual unlevered pre-tax cash flow by 2027.
- Meanwhile, other theme park operators, including Disney, are ramping up investment, signaling a competitive shift in the theme park industry.
As reported by Bisnow, Six Flags Entertainment Corp. (FUN), known for its network of 27 amusement parks, is thinking about how to balance its portfolio under its newly launched Project Accelerate.
Deal Details
The company is exploring the possibility of selling or closing parks that no longer meet strategic or financial goals.
While CEO Richard Zimmerman emphasized that each park plays a key role, he noted that noncore asset sales could be possible as part of the broader effort to optimize the company’s asset base.
This initiative, which Six Flags launched four months ago, aims to reach at least $800M in annual unlevered pre-tax cash flow by 2027. Project Accelerate is focused on narrowing management’s attention to the most profitable assets while improving operational efficiency and reducing debt.
Growing Revenues
The recent $8B merger with Cedar Fair Entertainment has added new assets to the amusement park operator, contributing significantly to the company’s improved financial results.
In its Q3 earnings report, Six Flags posted net revenues of $1.35B, of which $558M came from the merged assets.
Despite this growth, the company continues to assess its portfolio for areas that might be underperforming or no longer align with its future goals.
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Healthy Competition
As Six Flags reevaluates its parks, other theme park operators are ramping up their investments:
- The Walt Disney Co. (DIS) announced plans to invest $60B in its theme parks and cruise operations over the next decade, reflecting its commitment to expansion.
- In Oklahoma, the American Heartland project, although stalled, intends to build a massive $2B amusement park and campground.
What’s Next?
Despite reevaluating its portfolio of amusement parks, Six Flags stated there are currently no plans to close any parks. However, as part of its ongoing strategy to optimize its asset base, the company is likely to keep exploring its options for asset sales and operational adjustments in the coming years.
