Acquisitions

9 Months Ended

Sep. 29, 2019

Business Combinations [Abstract]

Acquisitions

Acquisitions:

On July 1, 2019, we completed the acquisition of two water parks and one resort in Texas, the Schlitterbahn Waterpark & Resort New Braunfels and the Schlitterbahn Waterpark Galveston ("Schlitterbahn parks"), for a cash purchase price of $257.7 million, subject to final working capital adjustments. The Schlitterbahn parks are included within our single reportable segment of amusement/water parks with accompanying resort facilities.

The purchase price was allocated to the underlying assets acquired and liabilities assumed based upon management's estimated fair values at the date of acquisition. To the extent the purchase price exceeded the estimated fair value of the net identifiable tangible and intangible assets acquired, such excess was allocated to goodwill. Based on the fair value of the assets acquired and the liabilities assumed, goodwill of $178.0 million, property and equipment of $58.1 million and an indefinite-lived trade name of $23.2 million were recorded. All of the goodwill is expected to be deductible for income tax purposes. The purchase price allocation remains preliminary as management completes the valuation assessment of property acquired and finalizes the working capital adjustment.

The results of the Schlitterbahn parks' operations from the date of acquisition, including $41.5 million of net revenues and $20.2 million of net income, are included within the unaudited condensed consolidated statements of operations and comprehensive income for the three and nine months ended September 29, 2019. Related acquisition transaction costs totaled $7.0 million for the nine months ended September 29, 2019 and are included within Selling, general and administrative expenses. If we had acquired the Schlitterbahn parks on January 1, 2018, our results for the nine months ended September 29, 2019 would have included net revenues and net income of approximately $68 million and $20 million, respectively. Comparable results for the nine months ended September 23, 2018 would have included net revenues and net income of approximately $66 million and $21 million, respectively.

In conjunction with the acquisition of the Schlitterbahn parks, we issued $500 million of 5.250% senior unsecured notes maturing in 2029 (see Note 7). The net proceeds from the offering of the notes were used to complete the acquisition, complete the purchase of land at California's Great America (see Note 12), to pay transaction fees and expenses, and for general corporate purposes and repayment of the revolving credit facility.

We completed an immaterial acquisition of Sawmill Creek Resort located in Huron, Ohio on July 3, 2019. Sawmill Creek Resort is a 236-room resort lodge located on 235 acres with a marina, a half-mile beach and 50 acres of undeveloped land.