We have written extensively over the last 18 months about Falcon’s Beyond Global, Inc., in the course of their now completed business combination with FAST Acquisition Corp. II, and those articles can be found on our website using the SEARCH function on our Home Page. Falcon’s Beyond, now trading as FBYD. is one of a minority of SPACs that completed business combinations and even fewer that are trading at a premium to the original $10 offering price. The following selection of short videos from our original report could be helpful.
Bana Hills Mountain Resort – Vietnam:
IMG Boulevard – Dubai:
The Making of Jane Goodall:
Atlantis Sanya – China:
As we have previously described in detail, this global entertainment/hospitality/technology company, an innovator in immersive storytelling, has a number of very large “priceless” (our term) relationships with businesses worldwide in scope.
(1) FBYD has a joint venture partnership with Melia’ Hotels, operator of almost 400 resort properties worldwide, planning to build compact theme parks adjacent to Melia’ properties. Melia’ contributes an existing successful hotel property and FBYD builds the park and other dining/entertainment facilities.
(2) FBYD’s Creative division, Falcon’s Creative Group, has a sight line of $755M from Qiddiya Investment Company (QIC) a wholly owned entity of the Kingdom of Saudi Arabia’s Public Investment Fund, who plans, over twenty years, to invest trillions to build the largest entertainment district in the world. This Saudia Arabian partner has invested $30M for a 25% ownership stake in FBYD’s Creative Group Division.
(3) FBYD has a joint venture with Hong Kong based K11 Group, one of the largest commercial property owners in China, operator of over twenty shopping malls, each of which is as large or larger than the U.S.’s largest, the 5.5 million square foot Mall of America. The first FBYD/K11 joint project will be installation of FBYD’s Vquarium, an underwater themed virtual adventure – at the 11-Skies development adjacent to the Hong Kong International Airport expansion.
ICR PRESENTATION – JANUARY 9TH
EXPANSION of FALCON’S NEW GROBAL HEADQUARTERS
Other than generally describing their business (in a time-constrained 25-minute presentation) on January 9th, and referencing the new Hershey relationship, described below, management disclosed that they are in the process of more than tripling the size of their facility in Orlando, from 14,000 square feet to over 50,000 sq. ft. The $755M (and growing) line of sight from QIC, the largest but far from the only creative opportunity, obviously requires a great deal of additional creative talent. Management indicated that, considering the quantity and magnitude of the projects within their line of sight, staffing for these activities needs to be a priority in calendar ’24. Presumably, as we have described in our previous reports, cash flow generation from the Creative division can later be used to fund a variety of projects in the Beyond Brands division.
THE HERSHEY LICENSE
As described previously in Investor Presentations during the SPAC merger process, the creative skills and reputation that have produced the above relationships should allow for the new Falcon’s Beyond Global to develop other substantial commercial opportunities.
The just announced global licensing arrangement with The Hershey Company is a further validation of Falcon’s reputation and of the opportunity ahead. Details will no doubt emerge in a matter of months, but as stated earlier this week: “through this expansive contract, Falcon’s will conceive and develop Hershey Branded Location Based Entertainment experiences, featuring …..Hershey’s iconic IP….in both the United States and international markets….Falcon’s will develop…”retailtainment” destinations that offer families and snack enthusiasts new immersive ways to experience their favorite tasty brands….each destination highlighted by a Hershey inspired attraction, a food and beverage experience….and a retail offering to shop for one of a kind products.”
That’s as much as we know now, but management earlier this week was (predictably) very enthused. It was interesting to us that a number of conference attendees mentioned to FBYD management that Hershey is (justifiably) very protective of their brand, so it is a credit to FBYD that Hersey has engaged them for this potentially worldwide creative venture.
NEW RELATIONSHIP IN JAPAN – announced the week following ICR Conference
On January 17, FBYD announced a new relationship, with Tanseisha Co., Ltd., a Tokyo based designer and creator of commercial and cultural facilities with a history of working with globally recognized brands. (Sounds similar to FBYD’s Creative division.)
Per the release: “The two companies will explore collaborating to develop new themed entertainment experiences, to bring popular Japanese anime and manga intellectual property (IP) to life through location-based entertainment (LBE), games, movies, and more.”
Our research indicates that Tanseisha is a publicly held company in Japan, profitable with very little debt, generating about $150M annually in revenues. The corporate skills as described seem to overlap those of FBYD in many respects, presumably with the potential for joint benefit, including introduction of Falcon’s IP to Japan, utilization by Falcon’s of Tanseisha’s IP, creative collaboration and utilizing Tanseisha’s relationships within Japan. More details describing the commercial potential of this new relationship will no doubt emerge in the near future.
YEAR END RESULTS
There was no financial discussion earlier this week, with fourth quarter operating results to be disclosed in late March. There will no doubt be a much more complete discussion of plans on the variety of fronts at that time.
While we await yearend ’23 results, FBYD is preparing for a major expansion of their (appropriately named) Global Headquarters. While preparing to more than triple the size of their Global Headquarters in Orlando, two new prestigious, potentially substantial financially, relationships have been announced: with The Hershey Company and Japan based Tanseisha Co., Ltd. Previously in place have been Important (we suggest “priceless” ) relationships with Qiddiya (in the mid-east), Hong Kong based KII Ltd, and Mallorca based Melia’ Hotels. The scale and variety of FBYD’s creative potential is obviously substantial and can expected to result in strong growth in revenues, cash flow and earnings over the long term.