Amusement park company Apex Parks Group has filed for Chapter 11 bankruptcy. The largest investors in the Irvine, California-based Apex include Carlyle Group and Edgewater Funds.
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Apex operates 10 amusement parks and two water parks in three states: California, Florida and New Jersey. Its brands include Big Kahuna's, Sahara Sam's, SpeedZone and Boom. Earlier this year, Apex closed an Indiana property, Indiana Beach, for which a buyer could not be found.
The bankruptcy petition gives a range of $50M to $100M for the company's assets, as well as a range of $100M to $500M for its liabilities. A number of landlords are listed as major creditors.
A veteran amusement park executive, Al Weber, founded the company in 2014 with investor backing to acquire a number of locally owned properties, which remained the company's business model through the 2010s. Weber, who had previously been interim CEO of Six Flags, died in 2016. Another former Six Flags executive, John Fitzgerald, succeeded him and is currently CEO.
Though all of its properties are currently closed because of the coronavirus pandemic, Apex has been struggling for years, the Wall Street Journal reports, especially with competition.
Smaller owners have faced increased competition in recent years, particularly from the largest players in the U.S. amusement park sector, such as Walt Disney Co., Six Flags Entertainment Corp. and Merlin Entertainment. The large players have had the deep pockets necessary to expand and reinvent their attractions with regularity.
Larger amusement park operators are also in a better position to weather the current storm, with resources unavailable to smaller operations. Six Flags, for instance, has suspended dividends and stock repurchases, and has received an increase of $131M from its revolving credit lenders, raising the credit facility it can use to a total of $481M. Disney has started to furlough employees during its indefinite shutdown.
Apex's senior lenders will bid for its assets, acting as a "stalking horse" in a court-supervised auction. The purpose of a stalking horse is to set a floor for the bidding, during which outside bidders might be willing to pay more than the stalking horse.
The company says it will reopen its properties as soon as conditions allow, and operate them during the bankruptcy proceedings. That will include paying employees and vendors, and honoring season passes.
