SANDUSKY — Cedar Fair LP made waves in the amusement park industry Thursday with the announcement that it will spend $261 million to acquire two iconic and award-winning water parks in Texas.
It also will acquire the rights to buy a now-closed water park in Kansas City, Kan., where a 10-year-old boy was killed in 2016 on a water slide billed as the tallest in the world.
Sandusky-based Cedar Fair said it has a definitive agreement to buy Schlitterbahn Waterpark and Resort in New Braunfels and Schlitterbahn Waterpark in Galveston. Both parks are considered water park industry leaders and innovators and have perennially been named “best” in their categories on lists compiled by amusement industry experts and travel and tourism publications.
Cedar Fair also said it has acquired the right to purchase the 40-acre Schlitterbahn Waterpark-Kansas City for $6 million. The property became stigmatized by the death of Caleb Schwab on Aug. 7, 2016, while on the park’s Verrückt ride, and the park did not open for the 2019 season.
However, the two Texas parks have maintained their customer base and along with the resort drew 1.2 million guests in 2018 and generated annual revenues of about $68 million, Cedar Fair said.
The all-cash deal requires regulatory approvals, but it is expected to close later this month, Cedar Fair said. The company will finance the purchase through additional long-term loans.
“We are very excited about the opportunity to bring these two award-winning Texas water parks into the Cedar Fair family,” Richard Zimmerman, Cedar Fair’s president and CEO, said. “These properties represent new markets for us with attractive demographics in the growing Central Texas region, and they align with our strategy to identify compelling opportunities to accelerate our growth and profitability. The investments we have made over the past five years to strengthen our back-of-house and customer-facing systems will support a smooth integration of these properties by ensuring a premium guest experience, strong team collaboration and superior execution.”
Schlitterbahn Waterparks & Resorts, a family-owned company based in New Braunfels, will keep a third park on South Padre Island and continue to manage a fourth park, now owned by a bank and located in Corpus Christi. Schlitterbahn has been owned by members of the Billye Henry family since it was formed in 1979.
In a statement, the Henry family said: “For the past 50 years, the Schlitterbahn family has focused all its resources, talent, and energy into building Schlitterbahn Waterparks and Resorts into an iconic Texas brand.
“It is now time for the company to enter a new and brighter stage of development and growth,” the statement said. It said the South Padre Island water park and resort will continue to be owned by one of the Henry families but will be re-branded.
Noting the sale was a difficult decision: “We believe Cedar Fair, with their approach to embracing parks that have a unique footprint, will be a phenomenal owner, and with the talented people that are the Schlitterbahn Family, will take Schlitterbahn Waterparks and Resorts to the next level of world-class family entertainment.”
The 2016 accident damaged the Texas company’s name and finances. In early 2017, the Schwab family settled with Schlitterbahn and other companies involved in the boy’s death for nearly $20 million. There were other undisclosed settlements with two other riders who were injured on the Verrückt.
In March 2018, a grand jury filed indictments against the park and three park employees, including the park's co-owner, Verrückt's designer and a former park executive. This past February a judge dismissed all charges against the construction company and Schlitterbahn owners.
Given the severity of the accident, Dennis Speigel, president of Cincinnati-based International Theme Park Services Inc., said a sale either to Cedar Fair or one of its competitors was predictable.
“The situation is that the accident in Kansas, the legal morass and the baggage that came with it, that has driven this. The sale of those parks is no shock to me,” Mr. Speigel said. “I didn’t know when and didn’t know who would buy them, but I knew it was coming because of the legal severity of the accident.”
Mr. Speigel said the Verrückt “should have never been built. That was the classic example of bigger is not better. It had too many issues with it.”
While it is unclear if Cedar Fair will attempt to buy and reopen the Kansas City park — it already owns an amusement park, Worlds of Fun, and a water park, Oceans of Fun, in that metro area — the Texas parks are prime acquisitions.
“I don’t think [the Texas parks] were impacted by what happened in Kansas,” he said. “So I think it’s a good move for Cedar Fair.”
A more immediate decision is what Cedar Fair will do with the Schlitterbahn name.
“I think the Henry name goes away, but the name ‘Schlitterbahn,’ I think that’s what you’re buying. You’re buying that name,” Mr. Speigel said.
First Published June 13, 2019, 3:46 p.m.
