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Blackstone, Vampire Squid Sucking Life From SeaWorld: Street Whispers

Stocks in this article: BX GS KKR CG FIG

CPG, which has a five-year deal with SeaWorld, gets a commission from vendors for the purchases made by SeaWorld, and then Blackstone appears to get another, separate cut, though the language in the prospectus isn't very clear on this point.

Blackstone touts both Equity Healthcare and CPG on its website as part of its Portfolio Operations Group, implying that SeaWorld's deals with these companies isn't in any way unique. Presumably, many of the companies owned by Blackstone have similar arrangements. That's the whole point: that Blackstone and all the companies it runs with its more than $200 billion under management is a more effective negotiator than SeaWorld would be by itself. But where do Blackstone's allegiances lie: with maximizing the profitability of SeaWorld or sucking as much money as it can out of the company as quietly as it can? Blackstone spokespeople didn't immediately respond to a request for comment.

All of these arrangements--the loading up with debt, the dividends to Blackstone, the Portfolio Operations Group--are at least reasonably visible, if not transparent, in SeaWorld's IPO prospectus.

Who Owns What when it comes to SeaWorld is buried under 1000 leagues of legalese. Forgive me from quoting at length from that legalese so that I can display it in all of its serpentine brilliance. The following three sentences are intended to explain--or at least legally cover the appropriate asses--with regard to Who Owns What:

On December 1, 2009, investment funds affiliated with The Blackstone Group L.P. and certain co-investors, through SeaWorld Entertainment, Inc. and its wholly-owned subsidiary, SeaWorld Parks & Entertainment, Inc. ("SWPEI"), acquired 100% of the equity interests of Sea World LLC (f/k/a SeaWorld, Inc.) and SeaWorld Parks & Entertainment LLC (f/k/a Busch Entertainment Corporation) from certain subsidiaries of Anheuser-Busch Companies, Inc. We refer to this acquisition and related financing transactions as the "2009 Transactions." As a result of the 2009 Transactions, Blackstone and the other co-investors currently own, through SW Cayman L.P., SW Cayman A L.P., SW Cayman B L.P., SW Cayman C L.P., SW Delaware D L.P., SW Cayman E L.P., SW Cayman F L.P., SW Cayman Co-Invest L.P., SW Cayman (GS) L.P. and SW Cayman (GSO) L.P. (collectively, the "Partnerships"), 100% of the common stock of SeaWorld Entertainment, Inc., the issuer in this offering.

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