Blackstone acquires Tussauds Group for £1bn

The Blackstone Group has agreed to purchase The Tussauds Group for £1 billion ($1.9 billion; 1.5x billion) from Dubai International Capital.

The private equity firm will combine London’s famous waxworks museum owner with Legoland theme parks, making it the world’s second largest owner of theme parks and tourist attractions in the process.

Dubai International Capital, which bought Tussauds exactly two years ago for £800 million, is taking a 20 percent stake in the enlarged business.

The deal makes Blackstone second only in size to Walt Disney Co, the owners of Disneyland, in terms of theme park operators and paves the way for more acquisitions particularly in the US.

In a thinly veiled defense of private equity in the face of attack from trade unions and some politicians, Joseph Baratta, senior managing director at Blackstone said in a statement: “This situation is a perfect example of the benefits of private equity ownership. Both Merlin and The Tussauds Group have grown significantly as a result of the support of their private equity owners.”

Blackstone has made the acquisition through majority-owned Merlin Entertainments, a UK company it bought for £102 million in May 2005 from Hermes Private Equity. It subsequently grew the company by adding LEGOLAND and Italy’s top theme park Gardaland to Merlin’s portfolio.

By combining Merlin with Tussauds, Blackstone is adding an array of top attractions to Merlin’s existing 38 sites in 11 countries.

Tussauds’ portfolio consists of the famous Madame Tussauds in London’s West End, five additional waxwork museums in New York, Amsterdam, Las Vegas, Shanghai and Hong Kong, as well as six other tourist attractions and theme parks mainly in the UK. Additional Tussauds museums are planned to open in Washington and Hollywood in 2007 and 2008, respectively.

Since buying Tussauds from Charterhouse Capital Partners, Dubai International Capital has added to the group by buying the UK’s highest-visited tourist attraction, The British Airways London Eye, located on the bank of the River Thames, as well as Warwick Castle and Heide Park in Germany.

The UK leisure parks in the group are Alton Towers, Thorpe Park, and Chessington World of Adventures.

Goldman Sachs, HVB and Lehman Brothers are providing Blackstone with the debt financing.