To many Americans, SeaWorld offers family-friendly fun amid penguins and killer whales.
To the Blackstone Group, it offers the potential for lucrative returns.
On Friday, SeaWorld Entertainment is set to debut as a public company on the New York Stock Exchange in one of the biggest exits for a private equity firm in recent months. SeaWorld has become a signature investment for Blackstone, which recently played host to a pair of penguins in its Park Avenue offices.
The initial public offering had a promising start Tuesday evening, pricing shares at $27 each, at the top of an expected range, according to a person briefed on the matter. At that price, the deal raised $702 million and valued the company at $2.5 billion.
Blackstone, which paid about $2.3 billion for SeaWorld in 2009, sold shares in the I.P.O. but retained control of the company. After investing about $1 billion of equity in the deal, the private equity firm received dividends of $500 million last year and $110.1 million the year before.
The theme park company was once a division the giant beer maker Anheuser-Busch InBev. Sensing that it was not part of the core business, Blackstone bought the company in a bet on the strength of brands like SeaWorld and Busch Gardens.
Since then, the company has added products, like iPhone and Android apps, and acquired an additional theme park last year, bringing the total to 11. It is also trying to build on its well-known brands, with plans to introduce an animated penguin character, Puck, at its theme park in Orlando, Fla.
The company has managed to turn a profit from its attractions like live shows and thrill rides, earning $77.4 million last year, four times what it made in 2011. As a sweetener for its new investors, it plans to pay a dividend of 20 cents a share starting in the second quarter of this year.
But SeaWorld’s business model is vulnerable to a weak economy and to consumers who remain frugal in the aftermath of the recession.
The company gets most of its money from admissions at its theme parks, and also relies on sales of food and merchandise. Its average ticket price is higher than those of two main rivals, Six Flags and Cedar Fair, according to a research note from Ian Corydon, an analyst with B. Riley & Company. Still, SeaWorld is trying to attract a broad swath of visitors.
“It’s more of a destination park strategy,†Mr. Corydon said in an interview. “The Orlando and Southern California parks are known the world over and draw guests from out of town.â€
SeaWorld is still haunted by an incident at its theme park in Orlando, Fla., where a trainer was killed by an Orca whale in full view of visitors. The tragedy drew intense criticism in the media, and it is the subject of a documentary, “Blackfish,†which is scheduled to be released this summer.
After revising its safety protocols, SeaWorld continues to deal with the legal fallout from the incident. The company has clashed with the Occupational Safety and Health Administration, which issued several citations.
“Once a trainer is in the water with a killer whale that chooses to engage in undesirable behavior, the trainer is at the whale’s mercy,†wrote Ken S. Welsch, a federal administrative law judge for the Occupational Safety and Health Review Commission, in a ruling last year.
SeaWorld’s private equity owner has shown strength in its business over all. On Thursday, Blackstone said its profit in the first quarter rose 28 percent, to $628 million, as it reported growth in its assets under management.
Before holding the initial public offering, Blackstone was reported to have fielded takeover offers for SeaWorld. But it turned those down, according to reports, betting that the public market would offer better returns.
In addition, Blackstone, the largest alternative investment firm in the world, has had some fun with its SeaWorld investment.
In January, the firm invited two special guests two its offices. The Magellanic penguins were well-behaved during their visit, a person with knowledge of the matter said at the time. But being unhousebroken, they left unexpected gifts on a carpet and a conference table.
