- Falcon’s Beyond Global LLC merging with Fast Acquisition Corp. II. (NYSE: FZT)
- Global entertainment development company specializing in intellectual property creation and expansion
- Partnerships with Melia Hotels International SA, Katmandu Collections LLLP, BRON Studios, Moonbug Entertainment, K11, PBS, Epic Story Media
- Worked on attractions in Dubai, China, U.S., UAE and more
- Developing theme parks in Dominican Republic, Spain and Mexico
- Management has strong understanding of hospitality and entertainment industries
- Led by entrepreneurs Scott Demerau (founder of House of Katmandu) and Cecil Magpuri (former Creative Director at Universal Studios)
- Fast Acquisition is led by CEO Sandy Beall, founder of Ruby Tuesday, Blackberry Farm
- Enterprise value of $1 billion implies reasonable entry multiple of 6.7x 2024 EBITDA
Imagine being able to buy The Walt Disney Co. stock before the company went public.
Savvy investors may now have a similar chance with Falcon’s Beyond Global LLC, which develops entertainment experiences and is merging with Fast Acquisition Corp. II. (NYSE: FZT), a SPAC. The combined company is set to trade on Nasdaq under the “FBYD” ticker and the transaction is expected to close this year.
Orlando, Florida-based Falcon’s Beyond is a theme park designer and developer formed in 2019 as a combination of Falcon’s Creative, which designs park rides, and Katmandu Group, which runs one of Spain’s most popular amusement parks. Spanish resort giant Melia Hotels is also a partner in the business.
The company is led by serial entrepreneur and Executive Chairman Scott Demerau, founder of House of Katmandu theme parks, and Chief Executive Officer Cecil Magpuri, who was previously Creative Director at Universal Studios. The Fast SPAC is led by Sandy Beall, a hospitality executive best known for founding and leading the Ruby Tuesday restaurant chain for over 40 years.
Before merging with Katmandu group, Falcon’s Creative developed games, digital content and attractions for clients like Universal Studios, Lego and SeaWorld for more than 20 years. These days, the company has content on Netflix.
Falcon’s Beyond combines intellectual property development with parks, media and merchandising. The company brings its own proprietary and partner IPs to global markets through owned and operated theme parks, resorts, attractions, patented technologies, feature films, episodic series, consumer products and licensing.
Its latest destination, Katmandu Park, a joint venture with Melia Hotels International SA, will open fully on March 15 in Punta Cana, in the Dominican Republic. Much like Universal’s City Walk, a dining, retail and entertainment complex dubbed Falcon’s Central will be free to visit, next to the theme park.
Here’s where the partnerships take center stage. The theme park will use characters from animated children’s program “CoComelon,” owned by Moonbug Entertainment. Moonbug is owned by former Disney executives Kevin Mayer and Tom Staggs.
As part of the partnership with Moonbug, Falcon’s will expand two of its children’s digital brands, CoComelon and Blippi, through new immersive “edutainment” experiences. The brands will also be featured at Falcon’s Central and Kids Camps.
Falcon’s plans to bring several children’s television programs into the physical realm. Properties such as Xavier Riddle and the Secret Museum, Dinosaur Train, Odd Squad, and Wild Kratts will be expanded in interactive environments that integrate media with hands-on exploration.
The company has also formed a strategic partnership with BRON Studios to jointly roll out worldwide entertainment initiatives including feature films, episodic series, video games, live events, location-based entertainment, and Web3 activations. BRON has been instrumental in more than 120 productions, including House of Gucci, Joker, Ghostbusters: Afterlife, Greyhound, and The Survivor.
In addition, Falcon’s and kids-franchise company Epic Story Media are collaborating to rapidly reimagine and expand the Katmandu brand’s fantastical legends beyond a theme park experience.
Falcon’s is betting investors will appreciate its pipeline of deals, including five full-concept master plans for theme parks that could generate $655 million in fees and sales total, based on the business’ historical billing averages. Resorts where the company enjoys generous tax benefits in Tenerife, Spain, and Playa Del Carmen, Mexico, will also soon follow, as part of its partnership with Melia.
Falcon’s is also developing a water park outside of Saudi Arabia’s capital, Riyadh, for Qiddiya Investment Co. Falcon’s is a major designer for Qiddiya, a planned entertainment region of theme parks, sports venues including motorsport racetracks and academies for sports and the arts. Falcon’s also is in talks with New World Development Co.’s K11 mall developer to create experiential locations in Greater China.
On Feb. 14, Falcon’s Beyond and Fast Acquisition Corp. II filed an S-4. Fast Acquisition Corp. II also filed a proxy extension asking shareholders to approve an initial three-month extension to merger deadline, with a board option to extend by four month-to-month periods, for potential total of seven months. FZT said the revised merger terms align “equity consideration and sponsor economics of the transaction with shareholders by significantly tying both to capital raised, financial performance, and share price targets of the combined company.”
As an incentive to new shareholders, 50% of all FZT shares will become convertible preferred equity paying an 8% dividend, which can be converted at $11 or will be mandatorily converted at $14.30. The convertible was designed to provide investors with downside protection.
The transaction values the business at 6.7 times projected 2024 EBITDA. That reflects about $149 million in EBITDA on $455 million in revenue that year.
The booming entertainment category is showing no signs of slowing. Smart investors will see a company that can turn new entertainment properties into amusement park attractions faster than the industry has historically. That’s a FastPass worth getting in on.