NBCUniversal to Buy Remaining 50% of Universal Orlando for $1.03 billion
NEW YORK - NBCUniversal and private equity firm Blackstone Group made things official on Monday, saying that the entertainment company will by Blackstone 50 percent stake in the Universal Orlando theme parks business. The announced purchase price of $1.025 billion came in at the low end of a range of $1 billion-$1.5 billion that Wall Street observers had expected.
The price is subject to various purchase price adjustments, which the companies didn't detail, but they said the deal puts an enterprise value of $3.165 billion on the theme parks venture.
The deal is expected to close on July 1, giving NBCUniversal, now controlled by cable giant Comcast, full control of Universal Studios Florida, Universal’s Islands of Adventure and Universal CityWalk. Comcast and NBCUniversal executives have previously lauded the performance of the theme parks business, making it likely that they would decide to take full control of the assets. Blackstone had acquired its stake in 2000 for $2 billion.
“The acquisition consolidates our ownership and confirms our long-term commitment to Universal Orlando and the theme park business," said NBCUniversal CEO Steve Burke. "Universal Orlando is a consistent and significant driver of operating and free cash flow and is performing extremely well. It has a superb management team and exciting growth opportunities.” He added that the deal is "attractively valued" and represents "strong financial returns" for his company.
Miller Tabak analyst David Joyce said the price tag came at the low end of expectations and was cheap, "especially with the huge increase in attendance in the first quarter," which was helped by the Wizarding World of Harry Potter attraction.
Blackstone previously told NBCUniversal it would sell its stake. The entertainment firm had the right to decide whether to acquire the stake or let the private equity firm look for another buyer elsewhere.
The purchase price for Blackstone’s interest will be funded with cash on hand, existing borrowings and a one-year $400 million debt issue from an affiliate of Comcast, the company said.