Despite the bear market for special purpose acquisition companies, there are still deals being made. FAST Acquisition II, a SPAC featuring NFL player Ndamukong Suh as an advisor, plans to merge with theme park developer Falcon’s Beyond Global in a deal valuing the business at $1 billion.
Falcon’s Beyond Global 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.
Currently, Falcon’s Beyond 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, according to a presentation shown to Falcon’s Beyond investors on Tuesday morning. Falcon’s Beyond Global styles itself as a mini Walt Disney Co., aiming to combine intellectual property development with parks, media and merchandising.
“Falcon’s Beyond is much more than an entertainment and hospitality company; it’s a fully integrated, experiential entertainment enterprise with an impressive collection of both IP and brick-and-mortar assets,” Fast founder Doug Jacob said in Tuesday’s presentation. “The company’s ideal unit economics and significant opportunity for expansion offers an exceptional platform for growth in the booming entertainment category.”
The deal is the 12th SPAC merger announced in the past four weeks in what has become a sluggish environment for the 589 SPACs seeking merger deals, according to data from SPAC Alpha. Sportico data shows there are 79 sports-related SPACs aiming to find or close mergers. One of them, Ace Global Business, filed with the SEC today terminating a previously announced deal to merge with cooking content publisher DayDayCook. The SPAC originally came to market seeking an Asia esports business.
The terms of the Falcon’s Beyond merger with the Fast SPAC seeks to incentivize shareholders to hold onto their equity through the merger—rather than opt to receive IPO capital back, as is their right—by creating a bonus pool of equity using 20% of the SPAC sponsor’s equity handed over for that purpose. In addition, half of non-redeeming shareholder equity will convert into a preferred equity, offering an 8% dividend and a $11 conversion price.
Falcon’s Beyond 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, according to the presentation. The business will also be part owner, with Melia, of destination resorts due to open in the next two years in Punta Cana, in the Dominican Republic; Tenerife, in the Canary Islands; and Playa del Carmen, in Mexico.
Past financial results for Falcon’s Beyond Global haven’t been disclosed yet. The transaction values the business at 6.7 times projected 2024 EBITDA, according to management. Based on ratios offered by the company to investors, that would equal about $149 million in EBITDA on $455 million in revenue that year.
The Fast Acquisition II SPAC is led by Sandy Beall, a hospitality executive best known for leading the Ruby Tuesday’s restaurant chain. In addition to the participation of athlete-investor Suh, the SPAC management includes Rumble fitness developer Eugene Remm, among others. The first Fast SPAC, which also includes Suh, saw a merger with Houston Rockets owner Tilman Fertitta’s restaurant chain fall apart in December.