Ardent Leisure unloads US-based Main Event in $1.1bn deal

The exit marks the return of the Dreamworld owner to an Australia-only focus.

Ardent Leisure Group is selling the Main Event Entertainment centres in the United States. Photo: Supplied

The owner of Queensland theme park Dreamworld, Ardent Leisure Group, has dramatically sold off its US based Main Event business to rival Dave & Buster‘s in a $US835m (($1.1bn) deal that will leave it holding only local assets.

The move ends its one time hopes of building a global leisure empire that were sparked when Macquarie Bank was running the trust and forged into the US 16 years ago.

Leisure was hard hit during the coronavirus crisis but now its fortunes are bouncing back with Main Event recovering due to improving conditions in the United States where hospitality and restaurants are up despite outbreaks.

The deal may mark a corporate retreat by Ardent but had been in the wings for two years after US private equity firm RedBird took a minority interest in Main Event.

It will also sell out while Ardent says it will now focus on turning round its local theme parks.

Dreamworld and the entire Gold Coast market were slammed by the pandemic and closure of Queensland borders but are now trading better than during the depth of the pandemic.

Ardent and RedBird have entered into a binding agreement with Dave & Buster‘s to sell Main Event for $US835m cash.

If the deal goes ahead, Ardent will receive about $US487m in cash, as it sold off a share in the restaurant chain to RedBird in 2020. It will receive the sum for its 72.6 per cent stake in the business.

Ardent will use the proceeds to repay its outstanding debt facility to the Queensland Treasury Corporation and other costs, while pouring the bulk of the proceeds into its theme parks. It expects to return about $430m or about 90c a share to investors.

Ardent shareholders will vote on the transaction at a meeting later this year, subject to customary closing conditions including receipt of US antitrust approval

The Gary Weiss-led board recommended that Ardent shareholders vote in favour of the deal in the absence of a superior proposal and an independent expert concluding it is fair and reasonable and in their best interests.

The sale follows a strategic review undertaken by Ardent and RedBird about the future ownership of Main Event. The strategic review resulted in multiple offers being received and the Ardent board said the transaction was in the best interests of shareholders.

Ardent expects to retain about $150m of cash from the deal and after the proposed distribution to shareholders. This will leave it with no debt following the sale. “The cash retained will be used to support the ongoing growth and development of the Theme Parks business,” Ardent said.

The deal shows a valuation multiple of approximately nine time adjusted earnings for Main Event for 2021. It comes on the back of Main Event‘s strong performance as its highest ever trailing 12‐month earnings ever in that year.

Ardent will have a strong cash position to support the ongoing recovery of the business, fund continued investment in new major rides, pursue opportunities for unlocking value in the parks’ surplus land and accelerate growth in this business.

“The transaction reflects the significant value creation that has been achieved by Ardent and the Main Event management team, particularly over the past four years,” Dr Weiss said. Main Event expanded its centre footprint by over 30 per cent and more than doubled earnings.

He flagged the local parks were “poised to benefit from the significant investments made in the business and the reopening of Australia‘s economy and its international borders”.