This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Blackstone, Vampire Squid Sucking Life From SeaWorld: Street Whispers

NEW YORK ( TheStreet) -- The Blackstone Group (BX - Get Report) and Goldman Sachs (GS - Get Report)' proposed initial public offering of SeaWorld stinks like a rotting whale carcass, but that isn't necessarily news.

Still, the deal deserves our attention if only for the likely futile hope that such scrutiny will counter the secret strategy of Wall Street takeover sharks: bore the world to death while quietly raking in all the $400 stone crabs on the planet.

While Blackstone is apparently the main owner of SeaWorld, someone with a sense of humor at Goldman Sachs decided the infamous vampire squid also ought to have a stake. The size of the stake isn't specified. A Goldman spokeswoman declined to comment.

Blackstone bought SeaWorld from Anheuser-Busch (BUD) in 2009. Since then, it has increased the company's debt load to pay itself two dividends worth a total of $610 million. Blackstone also purchased more than $100 million in SeaWorld debt. Some of the proceeds of the IPO will be used to pay Blackstone an unspecified fee.

Blackstone will retain control over SeaWorld after the IPO, which is a good thing for Blackstone, since it will allow the buyout firm to continue receiving all sorts of kickbacks from the company.

Take Equity Healthcare, for example, a sort of middleman among middlemen affiliated with Blackstone. SeaWorld's prospectus states that Equity Healthcare, which it contracted at the start of the year, "provides to us certain negotiating, monitoring and other services in connection with our health benefit plans. Because of the combined purchasing power of its client participants, Equity Healthcare is able to negotiate pricing terms for providers that are believed to be more favorable than the companies could obtain for themselves on an individual basis."

That doesn't sound too different from the pitch originally made by health insurers: that they help companies keep medical costs down by exerting leverage over doctors. But now it seems Blackstone's companies need someone to police the police. Meanwhile, it charges SeaWorld $2.50 per employee per month for the 8,400 employees who participate in the plan, which will rise to $2.60 in 2013 and $2.70 in 2014.

Another Blackstone affiliate called Core Trust Purchasing Group (CPG) "secures from vendors pricing terms for goods and services that are believed to be more favorable than participants in the group purchasing organization could obtain for themselves on an individual basis," according to the prospectus.
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
CG $19.27 0.00%
BX $34.12 0.00%
FIG $5.63 0.00%
GS $179.19 0.00%
KKR $18.67 0.00%


Chart of I:DJI
DOW 17,084.49 +33.74 0.20%
S&P 500 2,014.89 +15.91 0.80%
NASDAQ 4,830.47 +19.6820 0.41%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs