Comcast takes full ownership of Japan's USJ, PE firms to exit
Goldman Sachs, MBK Partners, Owl Creek Asset Management and PAG Asia Capital will fully exit Universal Studios Japan (USJ) after Comcast NBCUniversal agreed to buy the 49% of the company it doesn’t already own for JPY254.8 billion ($2.3 billion).
The deal values USJ at JPY840 billion, including debt, according to a statement. This compares to a valuation of JPY750 million – including JPY400 million in debt – when Comcast paid JPY183 billion for a 51% stake in the theme park operator in 2015.
USJ was established in 1994 as a joint venture between the government of Osaka and several private investors. This was done under license from NBCUniversal, which was acquired by Comcast in 2011. The theme park opened in 2001 and is one of four movie-themed Universal Studios parks globally.
Goldman invested $180 million in USJ in 2005 and it went public two years later. Then in 2009, with visitor numbers falling, a Goldman-led consortium - which included MBK, Owl Creek and Glenn Gumpel, USJ's CEO - delisted the business at an enterprise valuation of JPY165 billion, including JPY111 billion in equity. PAG committed $250 million in December 2013, investing alongside USJ management.
MBK disclosed in its 2015 annual letter that the sale of the 51% stake generated proceeds of $608.7 million, for a multiple of 3.32x. Including $299.6 in distributions already made and the value of the unrealized stake at that time (the latest transaction indicates the valuation has increased since then) the private equity firm was on course for a 4.95x multiple and an IRR of 36.9%.
The park features classic Universal attractions as well as attractions and shows specifically designed for the Japanese market. It introduced The Wizarding World of Harry Potter themed area in 2014 and then the Flying Dinosaur roller coaster last year. A Minion-themed area is expected to open in 2017, followed by Super Nintendo World in time for the 2020 Tokyo Olympics.
Comcast owns Universal Studios and Universal Theme Parks through its NBCUniversal unit. It wholly owns parks in Hollywood and Orlando, while the parks in Japan and Singapore operate under licensing arrangements. The company is also building a theme park in Beijing. Comcast said that the acquisition of USJ will more closely align the park with the parent company’s investment strategy for its properties.
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