Merlin Entertainments announced today the purchase of the Orlando Wheel in Icon Park, Florida. It is the tallest observation wheel east of America.
The British company has already purchased a Madame Tussauds and a Sea Life Aquarium in the area. With the purchase of this wheel, it can replicate the cluster strategy it has used at key tourist destinations.
The company is currently looking for more opportunities in Europe. It has already established UK clusters, including the London Eye at Blackpool Tower.
Merlin operated the Orlando Wheel from 2015 to 2018 before Icon Park ended the partnership and took control. The deal has led to the renaming of the wheel as the Orlando Eye.
Merlin announced the acquisition as it reported record revenues of £2.1 billion in 2023, an increase of 8 percent, and adjusted earnings of £662 millions, a 5.4% increase. After including £35million of government assistance during the pandemic, earnings were flat.
The second largest attractions group in the world welcomed 62 millions guests last year, an increase of seven million over 2022. Merlin operates 141 attractions and 5,342 rooms in 23 countries. It employs 30,000 people.
Pre-tax, the company went from a profit to a loss. The losses were triggered by a non-cash impairment charge of £210 million and a debt refinancing charge of £36 million. It made a profit of £32million before taxes, excluding exceptionals.
Nick Varney created Merlin in 1999. The company was initially listed in 2013, but it was again taken private in 2019. Kirkbi (the investment vehicle of Ole Kirk Kristiansen the Lego founder) increased its stake in the £6 billion deal from 29.5% to 50.0%, while Blackstone and Canada Pension Plan Investment Board held the remainder.
Scott O’Neil (54), who will become chief executive in November of 2022, stated that the three divisions have shown resilience this year due to the continued demand for “experiential attractions”.
Gateway Attractions, formerly Midway, increased revenue by 23% to £748 Million. At Legoland Parks revenue was up 1% to £914 Million.
The resort theme parks grew by 2 percent to £453 millions, thanks to strong sales at Heide Park, Gardaland and Merlin’s resorts located in Italy and Germany.
The price of Merlin’s attractions has been criticized in the past. But O’Neil explained that the demand was the main factor, as well as “consumers’ willingness” to pay. He added: “What appears to be happening is in the UK, people are coming in large numbers at peak times, but less at shoulder times.” Prices will change with demand.”
Karim Hajjar (61), chief financial officer of the company, stated: “Any notion that there has been price gouging is incorrect, as there was none.” We are providing value at an affordable price.
Merlin is set to open new attractions in the next year. These include Peppa Pig themed parks in Dallas Fort Worth, Gunzburg (Germany), and the Warwick Hotel at Warwick Castle.