Merlin starts its IPO roller coaster ride

Merlin, the owner of Alton Towers, Madame Tussauds and Legoland is readying itself for a new kind of wild ride, that of the public markets, as it floats on the London Stock Exchange today. The company aims to raise £200m by selling a 20% stake, which values it at £4bn.
 
The firm, the second largest visitor attraction operator in the world after Disney, is backed by private equity firms Blackstone Group and CVC, as well as Kirkbi, which owns the Lego trademark. Each will sell some of their holdings in the entertainment giant. According to the company, the sale is open to both retail and institutional investors, who can invest a minimum of £1,000 each.
 
Elbow deep in kiddies and queues, the group operates 99 attractions in 22 different countries worldwide and generated revenues of £1.1bn in 2012 - which all sounds pretty good.  But investors with families and a thirst for adrenaline will have an added incentive to buy shares: shareholders get a 30% discount on entry passes to Merlin’s theme parks. That’ll be half-term taken care of for the foreseeable future....
 
‘Merlin Entertainments comes to the market with a consistent record of strong growth in both revenues and profits and bright prospects for the future,’ said Nick Varney, chief executive.
 
‘The IPO will provide Merlin with the platform for our next stage of development and allow us to plan for the longer term. As such, we are very excited about this next chapter of our story, and look forward to creating value for our shareholders and more magic for our customers.’
 
With estimated growth of 11% a year since the company was founded in 1999, investors look set to enjoy some magic of their own - finally, having waited a long time for the company to list. In 2010, Merlin pulled out of a flotation at the last minute, when Blackstone deemed the market too weak. This year, with the UK’s IPO market revving back to life, all eyes have been on the Madam Tussauds owner, as commentators waited for it to finally take the plunge.
 
The company's non-executive chairman, Sir John Sunderland, said: ‘I have been impressed by the significant growth that Merlin has delivered as a private company… But there is more to come and I believe Merlin has a very promising future as a publicly listed company.’
 
Let’s hope its share price has fewer ups and downs that the rides enjoyed at Merlin’s venues - heaven knows they can produce quite the headspin.