IPO Preview: SeaWorld Entertainment

| About: SeaWorld Entertainment (SEAS)

Based in Orlando, FL, SeaWorld Entertainment (NYSE:SEAS) scheduled a $510 million IPO with a market capitalization of $2.4 billion at a price range mid-point of $25.5 for Friday, April 19, 2013.

Seven IPOs were scheduled for the week of April 15th. The full IPO calendar is here.

S-1 filed April 11, 2013.

Manager, Joint Managers: Goldman/ J.P. Morgan/ Citi/ BofA Merrill Lynch/ Barclays/ Wells Fargo Securities.

Co-Managers: Blackstone Capital Markets/ Lazard Capital/ Macquarie Capital/ KeyBanc Capital Markets/ Nomura/ Drexel Hamilton/ Ramirez.

SEAS is a collection of differentiated theme parks, with SeaWorld itself the core brand.

Blackstone (NYSE:BX) owns 100% pre-IPO, purchased on 2009. 50% of the IPO proceeds are going to Blackstone private equity selling shareholders.

At the price range mid-point, SEAS/Blackstone intends to pay a 3.1% annualized dividend.

Comparing 2012 with 2011 - revenue is up 7%, attendance is up 3%, revenue per capita is up 4%, operating income is up 58% and net income is up 305%. See 'FINANCIALS' below. SEAS is benefiting from an improved economic climate, relative to 2009. However, the rate of growth in operating earnings and net income can't continue.

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Six Flags (NYSE:SIX)






Cedar Fair (NYSE:FUN)







SEAS should be okay to buy on the IPO based on recent financial trends and expectations of further improvement in the economy.

SEAS is a leading theme park and entertainment company, and owns or licenses a portfolio of globally recognized brands, including SeaWorld, Shamu and Busch Gardens.

Over a more than 50 year history, SEAS built a diversified portfolio of "11 destination and regional theme parks that are grouped in key markets across the United States, many of which showcase our one-of-a-kind collection of approximately 67,000 marine and terrestrial animals."

Branded theme parks include the following:

SeaWorld is widely recognized as the leading marine-life theme park brand in the world. SeaWorld theme parks are located in Orlando, San Antonio and San Diego, and each ranks among the most highly attended theme parks in the industry.

Busch Gardens theme parks are family-oriented destinations designed to immerse guests in foreign geographic settings. Busch Gardens Tampa presents a collection of exotic animals from Africa, Asia and Australia. Busch Gardens Williamsburg, which has been named the Most Beautiful Park in the World by the National Amusement Park Historical Association for 22 consecutive years, showcases European-themed cultural and culinary experiences, including high-quality theatrical productions.

Aquatica branded water parks are premium, family-oriented destinations that are based in a South Seas-themed tropical setting. Aquatica water parks build on the aquatic theme of the SeaWorld brand and feature high-energy rides, water attractions, white-sand beaches and an innovative and entertaining presentation of marine and terrestrial animals. SEAS positions Aquatica water parks as companion water parks to SeaWorld theme parks in Orlando and San Diego and SEAS has an Aquatica water park situated within the SeaWorld San Antonio theme park.

Discovery Cove is a reservations only, all-inclusive, marine-life day resort adjacent to SeaWorld Orlando. Discovery Cove presently limits its attendance to approximately 1,300 guests per day and features premium culinary offerings in order to provide guests with a more relaxed, intimate and high-end luxury resort experience.

Sesame Place is the only U.S. theme park based entirely on the award-winning television show Sesame Street. Located between Philadelphia and New York City, Sesame Place is a destination where parents and children can share in the spirit of imagination and experience Sesame Street together through whirling rides, water slides, colorful shows and furry friends. In addition, SEAS has introduced Sesame Street brands in other theme parks through Sesame Street-themed rides, shows, children's play areas and merchandise.

Principal direct competitors of SEAS theme parks include theme parks operated by The Walt Disney Company (NYSE:DIS), Universal Studios, Six Flags, Cedar Fair, Merlin Entertainments and Hershey Entertainment and Resorts Company. SEAS believes its highly differentiated products provide a complementary experience to those offered by fantasy-themed Disney and Universal parks.

In addition, SEAS benefits from the significant capital investments made in developing the tourism industry in the Orlando area. The Orlando theme park market is extremely competitive, with a high concentration of theme parks operated by several companies.

SEAS currently employs 22,100 employees, 4,400 of whom are employed on a full-time basis. The number of part-time and seasonal employees, many of whom are high school and college students, increases during the peak operating season. None of the employees are covered by a collective bargaining agreement, and SEAS considers employee relations to be good.

SEAS expects to pay a dividend of $.20 per share beginning in Q2, which is an annualized rate of 3.1%.

In 2011 and 2012, SEAS paid special dividends of $110.1 million and $500.0 million, respectively, to stockholders. .

The Partnerships affiliated with The Blackstone Group L.P., 100%

On December 1, 2009, investment funds affiliated with The Blackstone Group L.P. and certain co-investors, through SeaWorld Entertainment, Inc. and its wholly-owned subsidiary, SeaWorld Parks & Entertainment, Inc. ("SWPEI"), acquired 100% of the equity interests of Sea World LLC (f/k/a SeaWorld, Inc.) and SeaWorld Parks & Entertainment LLC (f/k/a Busch Entertainment Corporation) from certain subsidiaries of Anheuser-Busch Companies, Inc.

Common stock offered by SeaWorld Entertainment, Inc.: 10,000,000 shares.

Common stock offered by the selling stockholders: 10,000,000 shares.

SEAS itself expects to net $231 million from its IPO. Proceeds are allocated to pay debt and to pay an advisory termination fee to Blackstone of $47 million.

Disclaimer: This SEAS IPO report is based on a reading and analysis of SEAS S-1 filing which can be found here and a separate, independent analysis by IPOdesktop.com. There are no unattributed direct quotes in this article.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.