The former CEO of Vail Resorts in Colorado said the employees and customers of Cedar Fair have little to fear if working for Apollo is similar to his experience.
"I have to tell you that meeting and getting a chance to work with the Apollo people was the most fulfilling, satisfying professional experience I have ever had," said Adam Aron, 55, CEO and chairman of Vail Resorts from 1996 to 2006. "It was always our theory at Vail, which Apollo supported all the way, if you really take good care of your customers, your employees and your community, the shareholders will do just fine."
Click HERE for continuing coverage of the Cedar Fair deal.
Apollo's public relations firm arranged a telephone interview with Aron after issuing a statement earlier this week saying it respects Cedar Fair's heritage.
Cedar Fair unitholders will be asked to vote in a few weeks on whether to allow Apollo Global Management, a private equity firm based in New York City, to buy the company and take it private.
Apollo has said it intends to keep Dick Kinzel as the company's CEO, and Kinzel said Apollo has assured him he'll remain in charge of the day-to-day operations at the amusement chain.
But the impending deal raises questions about what a change in ownership might mean.
Josh Kosman, a New York Post business reporter, is the author of a new book, "The Buyout of America," which argues private equity companies generally are bad for the companies they acquire. Private equity owners tend to emphasize short-term profits and often raise prices, cut customer service and cut capital investment, Kosman said.
Kosman said Apollo fits that mold. His book notes thousands of people lost their jobs after Apollo acquired retailer Linens 'n Things in 2006. The chain went bankrupt in 2008 and shut down. Five months before the bankruptcy, Linens 'n Things had 589 stores and 17,500 employees, the book says.
Aron, asked about Kosman's book, replied, "I can only talk from my own experience. My experience was not with the private equity industry. It was with Apollo."
Apollo turned Vail into a private company during Aron's first year but retained control of the board during his tenure.
Aron said during his 10 years at Vail, the number of employees grew from 2,000 to 16,000.
Hotel rooms grew from 72 to more than 8,000. Vail went from two to five ski resorts and from one to nine golf courses.
Kosman said Vail's experience was different from the usual private equity experience.
Typically, a private equity company buys a healthy firm it can milk for quick profits, Kosman said. Apollo acquired Vail after the previous owner went bankrupt.
It's possible the Cedar Fair deal could be a similar situation, Kosman said, as Cedar Fair essentially is using Apollo to refinance a crushing debt.