SANDUSKY In a stunning move that will double its annual revenues and attendance, plus bring in hugely popular children s characters such as SpongeBob SquarePants, Cedar Fair LP said yesterday it will buy amusement park rival Paramount Parks Inc. for $1.24 billion in cash.

The blockbuster acquisition, which could be completed by July, will give Cedar Fair five more amusement parks that generated $423 million in revenues last year and drew 12.2 million customers.

The company will become the third-largest amusement park owner in the world moving up from fifth place in terms of attendance behind the Disney Co. and Six Flags Inc., experts said. It provides the Sandusky firm with more markets and more parks with longer operating seasons.

The transaction gives the local company sole control of all the amusement parks in Ohio and its first park outside the United States, plus more than 900 empty acres that could be developed at the new parks.

The deal also gives the local firm Paramount s licensing agreement with Nickelodeon to use certain cartoon characters, as well as Star Trek attractions and a contract to manage Bonfante Gardens, a horticulture-themed family park in Gilroy, Calif.

Cedar Fair, which had $161 million in profits on $569 million in revenues last year, has seven amusement parks, including its flagship Cedar Point park, and five water parks. Combined, it had 12.7 million customers.

CBS Corp., which owns Paramount Parks, said in January it would sell the unit, which includes Paramount s Kings Island in Cincinnati. Cedar Fair officials said they were told Sunday night their offer was the winner.

Very exciting is how Richard Kinzel, Cedar Fair chairman and chief executive, termed the deal. He is to retire next year.

It s not every day that we have a chance to purchase five great family oriented parks that fit extremely well with our existing parks, he said.

A potential cloud hangs over the purchase, however. Mr. Kinzel said the firm would study whether to keep its headquarters in Sandusky or move to Paramount s new building in North Carolina. Nothing has been ruled out, he said.

Robert Routh, an analyst with Jefferies & Co. in New York, said the deal makes sense.

It doubles the size of the company and increases the pool of investors that can buy stock in the company, he explained.

If Cedar Fair can increase operating margins at the new parks, it will have a good shot at boosting its $1.84 yearly dividend, he said.

Rick Munarriz, an analyst with the Motley Fool online trading site, said, Usually, [Cedar Fair] likes to buy their parks one at a time instead of going to the buffet and gobbling everything up at once. And Geauga Lake is still struggling.

Its latest acquisitions were Geauga Lake in 2004 and Michigan s Adventure in 2001.

What I think is this will be Dick Kinzel s defining acquisition, given that he s retiring next year, Mr. Munarriz said.

The mega-acquisition requires no shareholder approval by either firm, but is subject to a federal anti-trust review. That review will determine whether the transaction can be closed in June or July or wait until September, officials said.

Bear, Stearns & Co. is an adviser and is providing $2 billion in financing that will pay for the purchase and existing debt.

Investors apparently liked the deal. Cedar Fair shares, traded on the New York Stock Exchange, closed up 39 cents yesterday at $27.30. CBS shares were up 5 cents to close at $25.26.

Hurt, however, was Six Flags, shares of which closed down 34 cents at $8.70. Six Flags is trying to sell some parks, and Cedar Fair was viewed as a possible buyer until yesterday.

The deal involves Canada s Wonderland in Toronto, Carowinds near Charlotte, N.C., Kings Dominion near Richmond, Va., and Great America, in Santa Clara, Calif., as well as Kings Island. Cedar Fair also owns Cedar Point and Geauga Lake in suburban Cleveland, the only other amusement parks in the state.

Also, the transaction gives Cedar Fair the Star Trek Experience, an interactive museum and 3-D rides, and a Star Trek-themed roller coaster at Carowinds.

An intriguing aspect is the acquisition of Paramount s licensing agreement with Nickelodeon to use the cable network s stable of popular cartoon characters at its parks.

Nickelodeon owns SpongeBob, Dora the Explorer, Blue s Clues, and Fairly OddParents cartoons and characters that are more popular with children than the Snoopy and Peanuts gang characters that Cedar Fair now uses.

I don t know how much it s worth, but I can almost guarantee that in a year or two, if Camp Snoopy doesn t bite the dust, you re going to see SpongeBob at all their parks, said Mr. Munarriz, of Motley Fool.

[Nickelodeon] just has a bigger audience. I don t know how much it ll cost Cedar Fair, but for them, it ll probably be worth it to use the Nick characters.

The purchase gives the northwest Ohio firm use of the Nickelodeon characters for four years, plus options to extend the license, Mr. Kinzel said.

The buyer projects breaking even at its new parks for two years, in part by eliminating $20 million to $30 million in duplicate expenses, but then hopes to add to its cash flow, said Peter Crage, Cedar Fair s chief financial officer.

Mr. Kinzel vowed there will be no disruption in dividend, which the company has paid for 19 years. The firm will borrow, if it must, to maintain it, he said.

None of the new parks competes with existing Cedar Fair properties, the CEO said, and the deal gives the firm a hedge against regional bad weather and economic downturns.

CBS decided it no longer wanted to keep the parks, which generate just 4 percent of its revenues, said David Miller, an analyst with Sanders Morris Harris in Los Angeles.

Some cross-promotion or a single ticket for all parks in Ohio might be tried, but gate and food prices for all parks will stay the same this year and likely won t change in 2007, Mr. Kinzel said.

Cedar Fair is weighing whether to keep a 10-year licensing deal for Paramount names and icons, such as Star Trek and Batman, which the CBS subsidiary used as tie-ins to brand its rides and attractions. Cedar Fair would have a buyout option next year to end Paramount licensing.

Four of the new acquisitions have longer operating seasons than all Cedar Fair properties other than Knott s Berry Farm, which is open year-round. None of the new parks is open year-round.

In terms of marketing, Cedar Fair gets Kings Island s The Beast, a roller coaster that is annually voted the best wooden roller coaster in the United States. All five parks have signature rides but none has a standout.

Contact Jon Chavez at: jchavez@theblade.com or 419-724-6128.

First Published May 23, 2006, 11:10 a.m.