Madame Tussauds Owner Merlin Entertainments Set For Flotation

Hot on the heels of Royal Mail, this morning brought news of another initial public offering — this time by Merlin Entertainments.

Merlin’s attractions include the likes of Madame Tussauds, The London Dungeons, The London Eye , LEGOLAND Parks, Alton Towers, Thorpe Park and Chessington World of Adventures, with a total of 99 attractions in 22 countries that generated total revenue of £1.07bn and underlying EBITDA of £346m in 2012.

It can boast of an increase in visitors by 11% a year on average between 2008 and 2012, delivering an average annual revenue and EBITDA growth of 12.9% and 14.3% respectively, as well as a factor that we at the Fool value highly — an experienced senior management team, with an average tenure of more than 15 years.

Chief Executive Officer Nick Varney commented:

“Merlin Entertainments comes to the market with a consistent record of strong growth in both revenues and profits and bright prospects for the future. We have successfully followed a clear and proven strategy to build a high-growth international family entertainment business, built on strong brands and a portfolio of attractions balanced by geographies, products and demographics. Our very strong trading performance so far this year, with revenues over 11% ahead of 2012, is a further reflection of this.

“Delivering memorable experiences to our millions of visitors is our passion and we see a world of opportunity ahead of us. Our experienced team has the ability and ambition to deliver on our plans, as we develop our existing businesses and roll out Merlin’s unique portfolio of leisure brands internationally. 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.”

The primary offering will be around £200 million for at least 20% of its shares, to be used to reduce net debt. 10-15% is due to go to retail investors, with a minimum application size of £1,000.

While it’s unlikely that Merlin’s IPO will be quite as sought-after as Royal Mail’s, it’s still expected to garner a fair amount of interest. But what are you thinking? Let us know in the comments box below!

Here at the Fool, we advocate buying shares with a minimum time frame of three to five years, especially companies with robust prospects, illustrious histories and dependable dividends.

That led us to produce a special report entitled "5 Shares To Retire On", which is completely free and without obligation -- simply click here now to find out the names of the five FTSE 100 companies in the report, and why our top analysts favour them for the long haul.