FAQ: Private Equity & Acquisitions
Tim Murphy, MBA, ICAE
Turnaround Specialist - Family Entertainment, Restaurant and Food & Beverages | Board Director Coney Park | Former CEO Boomers Parks
If you are an owner of a family entertainment center or theme park chances are you're going to be looking into private equity and acquisitions. You'll either be faced with someone who wants to buy your business to increase its success, or you may already be successful and so the next logical step would be to expand. Either way, if you are new to the world of private equity and acquisitions this article may be able to help.?
What is Private Equity?
Private Equity is when money is invested into companies that are perceived to have a significant potential for growth. Then they work with these companies to either fix the business and make it more profitable or to expand it. The money is contributed by professional investors and is placed into a fund. Between 3 to 7 years of successful ownership and working with the company, the manager of that fund will usually seek to exit the company. This is usually done by taking the business public or selling it for a higher return than it was purchased. Once this exit takes place, the profits are allocated from the return back to the investors and their manager.
Where is private equity likely to invest?
The short answer is, anywhere they see a potential for a substantial return. It could be a small town or a big city. Private Equity doesn't look at the location when it chooses to invest, it's all about potential.?
Who are the investors in private equity?
The funds in private equity usually depend on institutional or industrial investors.?
Is there a difference between private equity and venture capital??
Yes. The main difference is that venture capital will invest in the beginning of a company. By beginning, I mean the very concept or start-ups. They are the investors that get in on the ground floor. Private equity invests in more mature companies through buyouts and buy-ins in order to encourage and stimulate growth and improve the overall efficiency of the company.?
What is an acquisition and what is it for?
Typically, an acquisition occurs when one business purchases and takes over another business. Its main focus is on buying, selling, and consolidating other companies.?
What are the primary types of acquisitions??
Acquisitions are a large part of corporate expansion. They are categorized based on the product, industry and business affairs, or activities.?
领英推荐
Why would there be a reason for an acquisition??
There are many reasons, and each acquisition is different, but they all usually fall into one of these categories:
What are the benefits of an acquisition?
Not only does it help increase the market reach of the purchaser but it also increases its overall customer base. This, of course, leads to more profits. Sometimes, it's the only way to promote growth, increase sales, and expand the company.?
Have you read an article I’ve published here on LinkedIn and want to talk about the topic a little more? If you’d like to book a call with me regarding the Family Entertainment Industry or Private Equity, please feel free. I enjoy connecting & collaborating with others in the same professional space.
Tim Murphy is CEO of APX Operating Company, dba Boomers Parks, under the ownership of Cerberus private equity ($60B assets). Boomers Parks owns six family entertainment centers and two water parks with locations in California, Florida, and New Jersey.
As CEO of Boomers Parks since 2020, Tim took these eight parks from bankruptcy to profitability in just a year – in the middle of a global pandemic. When Boomers acquired these parks, they were operating at a $10 million loss. Tim transformed the customer experience and added new revenue streams to generate a 180% increase in revenue in 2021 and on a similar trajectory in 2022.
Tim launched his 35+ year career at Walt Disney World and has since served more than 150 entertainment, restaurant, and food & beverage brands across more than 10,000 locations in C-suite and senior positions.
Additionally, Tim is a Board Director with Coney Park & Happy City - Family Entertainment & Amusement Parks, part of The Carlyle Group ($276B assets), a private equity firm that operates 150+ family entertainment centers and amusement parks in Latin America.?
Tim has worked with top-tier entertainment and restaurant brands including Disney, Rebounderz Trampoline Parks, Darden Restaurants (Olive Garden, Bahama Breeze, etc.), Red Lobster, Jimmy John’s, Applebee’s, Sonny’s Bar-B-Q, Denny’s, El Pollo Loco, Hardee’s, Golden Corral, and Firehouse Subs.
Tim has overseen more than 35 purchase transactions involving over 1,200 restaurants, stores, and park locations.? With extensive experience in buying and selling businesses, handling negotiations with buyers and sellers, and creating strategic partnerships to build strong brands, Tim has facilitated deals ranging from $11 million to $350 million+.
Tim is a member of International Association of Amusement Parks & Attractions (IAAPA), California Attractions and Parks Association (CAPA), Florida Attractions Association (FAA), American Amusement Machine Association (AAMA), National Restaurant Association (NRA), California Restaurant Association (CRA), World Waterpark Association (WWA) and International Franchising Association (IFA). He is a licensed commercial real estate broker in the State of Florida. Tim earned a BS/BA in Accounting from the University of Central Florida and an MBA in Finance from Orlando College.