The parent company of Dollywood and Silver Dollar City will more than triple in size and move into California for the first time in a bid to take on the recently-expanded Six Flags as consolidation continues in the theme park industry.
Dollywood owner Herschend has signed an agreement to buy Palace Entertainment’s U.S. properties from Parques Reunidos to create what’s being billed as the world’s largest family-held themed attractions company.
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The merger will pit Herschend’s 21 theme parks and water parks against Six Flags’ 42 combined parks in a battle for regional amusement park dominance.
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The newly combined Herschend/Palace will boast more than 20 million annual visitors compared to the Six Flags/Cedar Fair combo that collectively draws 48.9 million.
The merger expands Herschend’s footprint into California for the first time with four locations — Castle Park (Riverside), Raging Waters (San Dimas) and Boomers (Palm Springs and Vista).
None of those small amusement parks, water parks and family entertainment centers are big enough to compete with major Southern California players like Disneyland and Universal Studios Hollywood.
The biggest additions to the Herschend portfolio include three historic parks: Kennywood and Idlewild (both in the Pittsburgh area) along with Connecticut’s Lake Compounce (billed as America’s First Amusement Park).
Parques Reunidos will hang onto its core theme parks in the European market that include Mirabilandia (Italy), Movie Park Germany and Tusenfryd (Norway).
The newly expanded Herschend introduces a “significantly ramped-up contender” to the Six Flags chain of regional amusement parks and the few remaining independent and family-owned parks in the United States, according to International Theme Park Services CEO Dennis Speigel.
“This merger may prompt other operators to reevaluate their strategies, potentially spurring liquidations and possible consolidations or partnerships within the industry,” Speigel wrote on the ITPS website.
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Herschend will fight for fourth place in the U.S. theme park market with SeaWorld and Busch Gardens owner United Parks, according to Theme Park Insider.
Disney (142 million), Universal (60.8 million) and Six Flags (48.9 million) remain far ahead of United (21.6 million) and Herschend (20 million) in annual attendance, according to the TEA/AECOM report.
Legoland California is part of the United Kingdom-based Merlin Entertainments Group that attracts 62 million visitors per year.
Further mergers and acquisitions in the theme park industry could be on the horizon, according to Speigel.
“There are definitely organizations, both public and private, studying the M&A landscape,” Speigel wrote on the ITPS website.
The list of family-owned and independent regional amusement parks in the U.S. not affiliated with Herschend or Six Flags includes Hersheypark (Pennsylvania), Holiday World (Indiana), Lagoon (Utah), Elitch Gardens (Colorado), Knoebels (Pennsylvania), Lake Winnepesaukah (Georgia), Fun Spot (Florida and Georgia), Silverwood (Idaho), Quassy (Connecticut), Morey’s Piers (New Jersey), Indiana Beach and Santa Cruz Beach Boardwalk.
Six Flags expressed interest in selling some smaller parks in the chain after a comprehensive portfolio review following the merger of Six Flags and Cedar Fair in July.
After the industry’s latest merger, Herschend could very well emerge as the most likely buyer for some of rival Six Flags’ smaller parks.
The smallest parks in the Six Flags chain include Frontier City (Oklahoma), Six Flags Darien Lake (New York), Valleyfair (Minnesota), Worlds of Fun (Missouri), Six Flags Great Escape (New York) and Michigan’s Adventure.
