Tag Archives: FZT



We have written, in August and September, articles describing FAST ACQUISITION CORP II and its pending business combination with Falcon’s Beyond. Links to both articles are provided below.

Falcon’s Beyond yesterday released a public update describing the theme park that will open in Punta Cana (in the Dominican Republic) in early 2023. Just below we provide the release.

Falcon’s Beyond Announces Details of the Caribbean’s First World-Class Theme Park

Katmandu Park/Punta Cana

Oct. 12, 2022 10:45 AM ET

New theme park to feature immersive entertainment and innovative rides and attractions based on the popular characters of the company’s original Katmandu franchise

ORLANDO, Fla.–(BUSINESS WIRE)– Falcon’s Beyond Global, LLC (“Falcon’s Beyond,” “Falcon’s,” or the “Company”), a leading fully integrated global entertainment development company specializing in intellectual property (IP) creation and expansion, announced today details of its forthcoming world-class theme park, Katmandu Park | Punta Cana. Expected to open early 2023 in the Dominican RepublicKatmandu Park, conceived and built by Falcon’s, will feature cutting-edge rides and attractions that immerse guests in the company’s original, proprietary franchise, The Hidden Realms of Katmandu.

Katmandu Park | Punta Cana will be brought to life through immersive storytelling experiences, including four marquee attractions and the use of several proprietary technologies. As part of one overarching, episodic Katmandu storyline, these major rides stand alone while living within the universe of the Katmandu franchise. Falcon’s Beyond carefully matched the attraction systems to the chapters in the Katmandu storyline in a way that best immerses guests in the unfolding adventure, while allowing them to enjoy each as an independent experience.

“Katmandu Park | Punta Cana will deliver an unprecedented theme park experience based on the popular characters of our very own Katmandu fantastical universe,” said Cecil D. Magpuri, CEO of Falcon’s Beyond. “Through innovative rides and attractions that deliver unmatched and immersive storytelling, guests will truly lose themselves in the Hidden Realms of Katmandu. Combined with other day and night entertainment, dining and shopping, Katmandu Park will offer an extraordinary experience for families and theme park lovers in the premier resort location of Punta Cana.”

Katmandu Park | Punta Cana’s signature attractions will include:

  • Voyage of the Fathom Wanderer: The park will feature its first-ever Suspended Theater attraction, where guests will join Kilgore Goode on an underwater mission to protect the Hidden Realm of Azurlan from a sea monster. For this attraction, guests enter and begin the experience in what appears to be a standard widescreen theater experience. But, unlike experiences that may exist in other parks around the world, there is a key element of surprise: guests are swiftly but elegantly lifted through the air and placed in front of another giant, compound curved screen, ushering them inside the story. Riders will soar through epic adventures, as this unparalleled attraction delivers the unique sensation of flight in a whole new way.
  • Challenge of the Mad Mage: The ON!X Theater attraction will reimagine the traditional 4D interactive theater with an impressive array of features seamlessly blended with advanced technology. Here, an Explorer Mage named Alvis challenges guests to a blaster duel through the Hidden Realms. A fully interactive real-time system gives every player the agency to direct the outcome of the action and even affect the narrative that unfolds before them on the massive, cinema-style screen, warranting repeatability to further discover new realms and interactions. A unique targeting system provides accurate and persistent positional tracking that not only detects where players aim, but where and how they move their blasters. Simultaneously, electric motion seats provide guests with multi-sensory feedback in the form of poking, tickling, vibration, wind, air blast, water mist, scent, localized speakers in headrests, and more.
  • Legend of the Desirata: A highly sophisticated attraction typically found only at the world’s biggest theme parks, the 4D Dark Ride attraction will be an immersive experience that tells the Katmandu origin story and empowers guests to feel the thrill of adventure through movement. Seamlessly blending scenic elements and media, erasing the lines between reality and imagination, guests follow inventor and explorer Kilgore Goode into the Himalayas in a dynamically moving vehicle to experience his journey into the Hidden Realms as he discovers the mysterious Desirata. The attraction features multiple integrated projection screens, delivering high-framerate and high-fidelity stereoscopic 3D media content, immersive audio, lighting effects, wind effects and stunning scenic elements throughout the guest journey. The action in the rider’s surroundings and on the screens is choreographed with the vehicle’s movement, making it feel as if the rider is truly immersed in the story alongside the characters.
  • EtherQuest: This interactive walk-through attraction will make its global debut at Katmandu Park | Punta Cana. The attraction combines proprietary technologies, elaborate scenic elements, immersive projection and an interactive gameplay journey to reimagine a traditional walk-through experience. Several of the rooms feature projection on all four walls to transport guests from the halls of “Jadu” (the house of Katmandu) into the Hidden Realms to defeat powerful Explorer Mages with various interactive props, find an invaluable EtherMetal ember and get back home. To give guests the chance to explore, play and influence their experience, this attraction uses an action-packed interactive walk-through system, where guests are really the main characters of their own adventure.

Additional attractions at Katmandu | Park Punta Cana will include Expedition Golf, a 36-hole mini golf course charting over mountains and inside caves, High Point Adventure, an outdoor ropes course experience, and The Quadagon, featuring four unique indoor climbing courses for both adults and kids. The centerpiece of the park’s plaza will be the Wheel of Infinite Wonder, a Katmandu-themed carousel with custom figures inspired by creatures and characters from the Hidden Realms. The park will offer several themed food and beverage venues, carnival-style games, retail shops and an arcade.

Each guest of Katmandu Park | Punta Cana will receive a smart wristband that carries their attraction passes, enables cashless payments and grants them their own unique and virtual identity with BeyondME™, a new free-to-use fan loyalty and online game platform for all ages. Through it, guests will be able to customize their own BeyondME persona, personalize their avatar, gain and spend experience points as virtual currency, called XP, and level up their status for additional benefits. In addition to the real-life experiences inside the park, BeyondME will connect to various digital experiences, such as mobile games, Roblox and online shopping, to further earn and redeem XP.

The theme park industry has long been dominated by traditional “mega park” experiences – attractions scattered across a massive footprint. With Katmandu Park, Falcon’s will offer a revolutionary alternative through a “Big Experience/Small Footprint” theme park concept, offering world-class experiences in a smaller landscape. Katmandu Parks will be connected to premier resort destinations, providing consumers a unique “resortainment” hospitality experience that seamlessly blends extraordinary entertainment experiences with premium resort amenities. The first of these new resorts, Falcon’s Resort by Meliá | All Suites Punta Cana, will debut in December 2022 and is located just steps away from the park.

Following Punta Cana, Falcon’s is expected to open Katmandu Parks in locations across the globe, including: Tenerife, Canary Islands, scheduled to open in 2024; Playa Del Carmen, Mexico, scheduled to open in 2025; and Puerto Vallarta, Mexico, with an opening date to be announced.

The Punta Cana park expands upon the original Katmandu Park that opened in Mallorca, Spain in 2012 to complement the beach holiday experience and has since introduced millions of guests to Katmandu’s whimsical universe. The Punta Cana location evolves the original concept with proprietary attraction technologies and immersive story concepts and is the latest step in Falcon’s mission to activate the Katmandu franchise across all forms of entertainment, including entertainment content, consumer products, and of course, themed location-based entertainment destinations.

The unveiling of Katmandu Park | Punta Cana follows other recent transformative news from Falcon’s Beyond. On July 12, Falcon’s Beyond announced plans to become a publicly listed company on Nasdaq through a definitive merger agreement with FAST Acquisition Corp. II (FZT) (“FAST II”) (NYSE: FZT), a special purpose acquisition company founded by Doug Jacob and headed by Sandy Beall. Upon the closing of the transaction, the new combined company will be named “Falcon’s Beyond Global, Inc.” and is expected to be listed on Nasdaq under the ticker symbol “FBYD.” More information about the transaction can be found in the Investor Relations section of Falcon’s website.

About Falcon’s Beyond

Headquartered in Orlando, Florida, Falcon’s Beyond is a fully integrated, top-tier experiential entertainment development enterprise focusing on a 360° IP Expander model. The Company brings its own proprietary and partner IPs to global markets through owned and operated theme parks, resorts, attractions, patented technologies, feature films, episodic series, consumer products, licensing, and beyond. The Company has won numerous design awards and provided design services in 27 countries around the world, turning imagined worlds into reality.

Additional Information

This communication relates to the proposed business combination between FAST II and Falcon’s Beyond. This communication does not constitute an offer to sell or exchange, or the solicitation of an offer to buy or exchange, any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, sale or exchange would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Falcon’s Beyond intends to file a Registration Statement on Form S-4 with the SEC, which will include a document that serves as a joint prospectus of Falcon’s Beyond and proxy statement of FAST II, referred to as a proxy statement/prospectus. A proxy statement/prospectus will be sent to all FAST II shareholders. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, or an exemption therefrom. FAST II and Falcon’s Beyond will also file other documents regarding the proposed business combination with the SEC. BEFORE MAKING ANY VOTING DECISION, INVESTORS AND SECURITY HOLDERS OF FAST II ARE URGED TO READ THE REGISTRATION STATEMENT, THE PROXY STATEMENT/PROSPECTUS AND ALL OTHER RELEVANT DOCUMENTS FILED OR THAT WILL BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED BUSINESS COMBINATION AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED BUSINESS COMBINATION. Investors and security holders will be able to obtain free copies of the registration statement, the proxy statement/prospectus and all other relevant documents filed or that will be filed with the SEC by FAST II or Falcon’s Beyond through the website maintained by the SEC at www.sec.gov. The documents filed by FAST II with the SEC also may be obtained free of charge upon written request to 109 Old Branchville Road Ridgefield, CT 06877. The documents filed by Falcon’s Beyond with the SEC may also be obtained free of charge upon written request to 6996 Piazza Grande Avenue, Suite 301, Orlando, FL 32835.










We wrote in late July about the substantially improved SPAC structure at FZT and in late August provided our interpretation of the Investor Presentation. In summary, we believe that, opposed to many other SPACs, this Business Combination will be consummated, due to the fundamental attractions of Falcon’s Beyond artistic creativity and theme park design/operating skills, combined with the operating and financial strength of their Joint Venture partner, Melia’ Hotels International. Our previous articles can be accessed with the SEARCH function on our HOME Page. (Use “FZT”). As we wait for the S-4 filing, which will obviously provide a great deal of quantitative information we thought it would be productive to fill out the qualitative mosaic of this unique “entertainment/hospitality” venture. We therefore visited last week the first site to be developed by Falcon’s/Melia’, at Punta Cana in the Dominican Republic.

Development of the Katmandu Theme Park is well along, with heavy construction largely completed, mechanical and electrical support installed, predictably still with a great deal of finishing work to be done. Equipment, some of it on site, is yet to be installed. Flooring, wall coverings, final lighting, all kinds of finishing treatment is still to be done, but the project seems on track to be completed by late this year or very early in ’23.

The 2018 built five star hotel that Melia’ Hotels (founded 65 years ago)  has contributed to the Joint Venture,  currently called Paradisus Grand Cana, to be renamed Falcon’s Resort by Melia’, is a standout. Whether you call it the “hospitality quotient” or “customer pleasing culture”, it was outstanding. Every staff member seemed to be wearing a smile, and that does not happen by accident. There was  always somebody nearby, eager to help. Every surface was spotless and the maintenance of the landscape was impeccable. Labor is obviously available at an acceptable wage and happy to be employed by Melia’. It’s fair to say that our previous article describing the Falcon’s/Melia’ Joint Venture  did not emphasize adequately what Melia’, managing 380 hotel properties worldwide, brings to the table. Our trip was obviously instructive in terms of Melia’ operating skills. Melia’s financial strength seems important as well, and we will address that more completely in the near future.

Below we provide pictures, from the Melia’ Hotel website, that show important aspects of the resort experience at   Punta Cana. As you scan them, think about what this might cost at resorts you’ve been to and we will provide the relevant cost/day at the end of this article.  We should emphasize again that the pictures were matched, in terms of visual appeal, cleanliness, and the quality of the food service, by our personal experience.



RATES ARE CHARGED “PER PERSON”, AND ARE “INCLUSIVE” of ROOM, FOOD & BEVERAGE (INCLUDING ALCOHOL), BASICALLY “ALL YOU CAN EAT AND DRINK”. Melia’ has a reward  system in place, with 14 million members, that provides a discount up to 20% for repeat customers. The “rack rate” quoted to me today, without discount or promotions, for the One Bedroom Suite pictured, is $370/night, “all inclusive” for two this time of year (“off season”). The rate in February (“peak season”) would be about 35% higher or about $500 per couple per night, all inclusive. Considering that food and beverage for two on vacation could normally run $200-300 per day, the remaining room cost “off season” would be $170-270/day “off season”, 35% higher in February or March, at “peak”. That’s pretty good, but Melia’ Reward Members, with a 20% discount  would only pay $296/per night per couple today, almost nothing for the room after deducting the normal cost of food and drink. At peak season $500 per couple per night leaves a net room cost of only $200-300, also outstanding value when there is snow on the ground in New York City.


While noting that Paradisus Grand Cana, to be renamed Falcon’s Resort by Melia’, is among the highest priced facilities within the Melia’ portfolio, the hospitality skills demonstrated are likely in place at lower priced facilities as well (at a proportionate level). We’ve discussed before the attractive ROI for both Falcon’s Beyond and Melia’ as a result of the Joint Venture. Now that we have visited Punta Cana, we can better appreciate the hospitality expertise of Melia’ and its complement to the creativity within Falcon’s Beyond.

It is worth recalling that Melia’, in Mallorca, was able to charge 11% higher room rates, with free access to the Katmandu Park. There seems to be similar pricing power in this situation, considering the current price/value equation and reports that the hotel is already at capacity “in season”.  Previous cash flow generation should be materially improved within the Joint Venture because of higher room rates and occupancy, also augmented by lower food cost since guests will eat some of their meals at the Katmandu Park rather than the hotel. As we’ve reported, the Punta Cana project will be followed within eighteen months by similar developments in Tenarife (in the Canary Islands, off the coast of Spain) and Playa del Carmen (in Mexico). Beyond that : Melia’ manages  a portfolio of 377 other hotels, many of which are in “priceless” locations.

We will report further once the S-4 is filed.

Roger Lipton






Insider Buying and Stock Buybacks are good leading indicators of better times ahead. In these ongoing difficult times within the restaurant industry, with the stocks selling at historically inexpensive prices, one might expect both insiders and companies to be taking advantage. However:  through the end of August there has been no material insider buying within publicly held restaurant companies over the last six to twelve months.  From the standpoint of stock buybacks, on the other hand, Denny’s and Dine Brands have bought material amounts in this current year. Denny’s spent $37M in the last quarter (6% of the market cap), bringing the YTD total to $46M. The remaining authorization of $168M is about 30% of the current market cap. Dine Brands bought $63M worth in Q2 (about 5% of the market cap), after purchasing $41M in Q1. There is $74M still authorized. It is interesting that both Denny’s and Dine Brands are primarily franchising companies, with free cash flow available even as their franchised operators are fighting to control food and labor while searching for affordable new locations. The absence of buying programs where most stores are company operated may be telling us something about their confidence looking ahead.

Relative to Franchisor/Franchising relationships, we spent an educational several days last week at FAT Brands’ multi-branded convention in Las Vegas, with almost 2,000 attendees representing seventeen brands. Management of FAT Brands not only provided a first-class event, top management, administrative staff, and Directors as well, all “walked the talk” throughout, as gracious hosts and, most importantly, appreciative partners of their franchisees. One of the themes enumerated throughout by CEO, Andy Wiederhorn, and his team, is that the purpose of the conference was not to “congratulate ourselves” but to “make ourselves collectively better”. The overriding most important aspect of the event was that management of FAT Brands (and their entire organization) communicated effectively their primary dedication to the long-term success of each franchisee.  There was every indication, including a conversation we had with a supervisor that has been with Fatburger (and Andy Wiederhorn) for seventeen years, that the message provided to franchisees in Las Vegas represents deeply held principles. We’ve previously been critical of some franchisors being relatively unresponsive to franchisees’ problems, Dunkin’ Donuts spending over $1B to buy back stock while Starbucks was “eating the lunch” of their franchisees, and how Restaurant Brands hollowed out their field organization to cut G&A after buying Burger King. Based on everything we observed in Las Vegas, there is no such risk to franchisees at FAT Brands.

The SPAC market is generally moribund, as the shakeout which we predicted continues apace. Hundreds of billions of dollars were raised, as Sponsors of all stripes, including show business and athletic celebrities joined the dance. Today, however, hardly any new deals are being filed and 115 SPACs in registration are still hoping to raise about $19B. Amazingly enough, there are today 566 SPACs, with $148B “in trust”, actively seeking acquisitions with total buying power, including leverage, approaching a trillion dollars. The problem is that the shareholders of those 566 SPACs have to approve the proposed deal. With the stock market down so much, it is very tempting for investors to redeem and redeploy the funds into more well-established situations. The Business Combinations most likely to be approved will be those where the surviving company is profitable and growing. An example would be Getty Image Holdings (GETY), still trading at a 25% premium over the original $10.00 IPO unit price, which no doubt has something to do with GETY’s $74M of Adjusted EBITDA in Q2’22. Within the hospitality industry, the only completed deal over the last couple of years was BurgerFi(BFI) but disappointing results as a public company have produced a stock at $3.00 and change, down from a high in the teens. More to the current point, we have written about Doug Jacob’s and Sandy Beall’s FAST Acquisition II (FZT), their improvement of the typical SPAC structure, and their plans to merge with Falcon’s Beyond, a growing and profitable hospitality/entertainment company. Though historical financials have not yet been filed, current Falcon Beyond operations, according to the Investor Presentation, are cash flow positive (similar to GETY), and available for the development of brick & mortar assets. This feature, along with the banking relationships of joint venture partner, Melia’ Hotels, should allow for growth as planned, even without a broad vote of confidence from current FZT shareholders. The possibility of $150M annualized EBITDA in only about 2.5 years, combined with the potential to build billions of value attached to brick-and-mortar assets makes the current $1B starting point appear reasonable. Time will tell, of course, and we will comment further after historical financials are provided and as fundamentals develop.

Ignore History at your Peril. This publication and this column make a conscious effort to look beyond the headlines and the consensus, hoping to put current economic trends in a longer-term context. Nobody can call every twist and turn, especially in the very short run, but we’ve warned about more than ten years of suppressed interest rates encouraging investors in both equity and debt to reach for “return/yield” and misallocating capital in the process. We’ve discussed with trepidation stocks trading at sixty or seventy times sales, SPACs being pumped out like there is no tomorrow, and twenty thousand different cryptocurrencies, Bitcoin being just one, that amounted to almost $3T of new currency at the top ($1T today). Within the restaurant industry, we’ve warned investors about the ridiculous valuations at the start of trading of new issues including Sweetgreen (SG), Portillo’s (PTLO), Black Rifle Coffee (BRCC) and Dutch Bros (BROS). Sometimes, in the world of investing, it’s about the pitches you don’t swing at, rather than those you do.

Roger Lipton



Introduction: This proposed transaction was announced on July 12th. We’ve followed the professional careers within the FAST II Sponsorship group for many years, were initially intrigued with their creativity in terms of improving the typical SPAC structure, and informed our readers accordingly on 7/28. After studying the Investor Presentations, this situation is well worth more study.  A preliminary S-4 has not yet been filed, but between the Investor Presentation and publicly available information regarding Falcon’s Beyond,  the Company is introduced here in fifty-nine seconds

( https://vimeo.com/570417222 ) (point & click, point & click on link)

and we provide the report below.


Relative to the improved SPAC structure, our 7/28 article concluded:It’s possible that the FZT/Falcon’s Beyond deal would take place with or without the adjustments. In our mind, however, the new structure provides a much more balanced approach between “organizers”, operating principals and the public investors and is no doubt a function of &vest’s navigation of the SPAC market over the past few years. There is less of a “promote” for the organizers and underwriters, potential stock sales by the operating principals are longer term than normal, more dependent on building the business as well as the stock price, all improving the reward/risk profile for public investors.”  See our 7/28 article for “Transaction Overview” and “SPAC Shareholder Incentives”.


FAST Acquisition Corp. II (FZT) raised $222M to utilize in acquiring a company in the hospitality industry.  The Sponsorship group and proposed Board of Directors have outstanding brand building credentials in the hospitality/restaurant/retail industries. Included are &vest’s Doug Jacob (co-founder of &vest), Bill Hinman (partner of &vest and former Director of the SEC’s Division of Corporate Finance), Sandy Beall (partner of &vest, founder of Ruby Tuesday’s, founder of Blackberry Farm and Blackberry Mountain) and others.

FAST II is proposing the acquisition of well-established Falcon’s Beyond, an Orlando, FL based fully integrated, experiential entertainment enterprise with a collection of both Brick & Mortar and Intellectual Property assets. The principals at Falcon’s Beyond have unquestionable creative and operating credentials. The Executive Chairman of Falcon’s Beyond is Scott Demerau, founder in 2007 of the House of Katmandu in Mallorca, Spain, which became a model for successful theme parks worldwide. In 2012 he established a 50/50 Joint Venture with Melia’ Hotels, which operates more than 380 resort properties across over 40 countries. The CEO of Falcon’s Beyond is Cecil D. Magpuri, who founded in 2000 predecessor Falcon’s Treehouse, which has designed, planned and helped to execute over $100 billion worth of hospitality/entertainment venues worldwide. In addition to Falcon’s Creative Group that designs the projects, and Falcon’s Beyond Destinations that implements the plans and owns the hotels, theme parks and retail destinations, there is Falcon’s Brands that will deploy proprietary and partnered brands across entertainment and consumer product categories. Among the Board Members of Falcon’s Beyond is Simon Philips, previously General Manager of The Walt Disney Company EMEA and President of Marvel Entertainment.

The broad objective of the newly public Falcon’s Beyond will be to produce operating cash flow, at the same time building for themselves brick and mortar, as well as intellectual property, just as they have created, planned and built for others over the last twenty-two years.



We will describe the deal terms and valuation in greater detail below but the post-deal valuation, at $10.00/share, will be about $1B, about 6.7x the projected $150M EBITDA run rate by mid 2025.  Importantly, the principals of Falcon Beyond are merging their entire professional careers into this venture and will own about 80% of the equity, as well as providing $60M to the Melia’ joint venture. Public SPAC shareholders (assuming modest redemption) will own about 10.7%. Private Placement investors will own 5.8% and Sponsors about 3.0%.

Critically, there will be no operating “burn rate” at the outset, since the Falcon’s Creative Group is already a going concern, with tangible visibility to provide $755M of goods and services over 4-5 years. The cash flow generation from Creative should help to fund the capital needs of Destination’s brick and mortar effort, with the first Melia’ JV project (Punta Cana) opening by early 2023 and two more to follow between early ’24 and mid ’25. Longer term, the potential from building Brands’ proprietary Intellectual Property could be a substantial third leg of Falcon’s unique position in hospitality/entertainment and represents significant upside to investors.


The July 12th Investor Presentation, with the associated conference call, provided some context as to how the key principals came to form today’s Falcon’s Beyond. Executive Chairman, Scott Demerau, has spent decades building and operating themed entertainment facilities, both in the US and abroad.  In 2007 he founded the House of Katmandu, a relatively small theme park adjacent to one of 380 Melia’ Hotel properties, in Mallorca, Spain. Katmandu’s success, accompanied by a dramatic improvement in room rates and occupancy at the hotel, encouraged Melia’ and Demerau to expand the Mallorca site into a 50-50 jointly owned Katmandu Park & Resort venture. In the course of Demerau’s activities, at Katmandu and elsewhere, he used the creative services of Cecil Magpuri, CEO of then Falcon’s Treehouse, formed in 2000. Prior to Falcon’s, Cecil had been Creative Director at Universal Studios and directed several projects like Apollo13, The Ride, Twister: Ride it Out!. In 2021, Demerau and Magpuri merged their companies to create Falcon’s Beyond.

Another 2:26 minutes, broadly describing Falcon’s Beyond:

https://vimeo.com/641310306   (point & click, point & click on link)


Short to intermediate term, Creative and Destinations will be fifty-fifty contributors to the results. Longer term Brands, its economics not included in the deal discussion, is expected to be an equal third leg and therefore represents further upside for investors.

Falcon’s Creative Group, led by CEO, Cecil Magpuri, in addition to supporting three internal projects, is currently executing the master planning for five third party theme park operators. These five parks will include the design of over 100 attractions, the media production for over 19 attractions, as well as procurement of necessary hardware. This backlog (including $100M for the Destination/Melia’ JV) will amount to about $755M of billing over 4-5 years, and, based on indicated margins, should generate EBITDA of about $158M. These projects include a very large Creative project involving engagement by Saudi Arabia’s Qiddia Investment Company to lead the design of 26 assets within a new entertainment district called Qiddia. Creative began work on Qiddia in 2018 on this very long-term project that will encompass 367 square kilometers (19×19 km.,11×11 mi.). The expected operating profit within Creative should generate cash flow for investment in the brick & mortar at Falcon’s Beyond Destinations as well as buy time for Falcon’s Beyond Brands to monetize their asset light efforts.

Below: videos – 3 of $100B worth of projects – (point & click, point & click on link)

BaNa Hills Mountain Resort in Da Nang, Vietnam on Vimeo

Making-of Becoming Jane: The Evolution of Dr. Jane Goodall at National Geographic Museum on Vimeo

https://vimeo.com/279458337   Atlantis Sanya – China’s premier Underwater World

Falcon’s Beyond Destinations will be capitalizing on the potential of the joint venture with Melia’ Hotels International, owner and operator of about 380 resort hotels worldwide. In most anticipated locations Melia’ plans to contribute an existing hotel to each project within the 50-50 joint venture and Destination provides the capital for the Katmandu Park (owned 50-50) as well as the 100% Destination owned Falcon’s Central entertainment and food center. The first major JV project will be in Punta Cana, Dominican Republic, to open by early 2023. It was recently announced by Melia’ that the new park will open in December, and the hotel in the JV is already the number one hotel in Punta Cana.  The second joint location will be at Tenerife, in the Canary Islands, to open in early to mid-2024. The third spot is at Playa del Carmen, in Mexico, the park to be open in early-mid-2024 and the hotel in mid-2025.

The Investor Presentation estimates that by mid-2025, Destination’s 50% of the joint venture plus 100% of Falcon’s Central, depending on the cap rate, will be worth from $954M to $1.451B.

Falcon’s Beyond Brands is focusing on expansion, execution and monetization of proprietary as well as partnered brands. Brands, consumer products and entertainment content can all be licensed, just as proprietary existing brands such as Katmandu, Cadim, the Monster Wave and VQuarium. In conjunction with Creative and Destination, as well as 3rd party partnerships with BRON Studios, Moonbug Entertainment, PBS Kids, Epic Story Media and others, this is an asset light effort that could be very substantial over time. Management estimates that Creative and Destinations will contribute 50% each to EBITDA for the next two years, but each division could contribute about 33% longer term.


We have more to learn, from the S-4 when filed and our further research, but it seems at this point that success is more a question of how much and when, rather than if. The professionals at Falcon’s Beyond are not being asked to do anything they haven’t done before. A billion dollars is a significant starting valuation, but the ROI on over $200M of SPAC proceeds, invested productively in brick & mortar projects, and the earnings power at the Creative division should support a good portion of that. Moreover, the value of Falcon’s 50% portion of just the first few projects with Melia’ Hotels could approximate the initial $1B valuation.  Longer term, more Destination projects with Melia’ and others, expanded Creative business with Qiddiya (described below) and others, and Brands could combine to double the projected mid-2025 $150M run rate of EBITDA by ’27-’28. It is a crucial consideration that current Creative operations are cash flow positive, available for the development of brick & mortar assets. This feature, along with the banking relationships of Melia’, should allow for growth as planned, even without a broad vote of confidence from current FZT shareholders. The possibility of $150M annualized EBITDA in only about 2.5 years, the potential to build billions of capitalized value attached to new brick and mortar assets, with Intellectual Property development a material “kicker”, makes the current $1B starting point appear reasonable. Precise timing of events is always uncertain, and the degree of success cannot be assured, but the intellectual, physical and financial assets seem to be in place. While, per Yogi Berra, “Predictions are always difficult, especially about the future.”, uniquely positioned Falcon’s Beyond provides an unusually attractive investment proposition


Falcon’s and its predecessor Creative companies have executed story-driven development projects related to over $100B of projects in 27 countries and currently have $755M of revenue visibility. They are uniquely equipped to respond to the secular shift to “experiential” consumer leisure pursuits.

A 50/50 Destination driven joint venture with Melia’ Hotels, operator of 380 resort venues around the world, can provide value to Falcon’s common stock by way of $150M of annual EBITDA and $1B of asset value in about 2.5 years.

Last, but far from least, Falcon’s Intellectual Property and Brand Development is expected to be an equal third leg to Falcon’s long term value building process.  Falcon’s Creative Group designs the projects, Destination develops the hard assets, and Brands will deploy proprietary and partnered brands across entertainment and consumer product categories.

Falcon’s Creative Group

For twenty-two years Falcon’s Creative Group has executed master plans, design, and media production projects all over the world, winning over 30 industry awards, and creating the capacity to serve billions of guests. The decades of experience as a third-party consultant sets up Falcon’s to now develop physical entertainment attractions and Intellectual Property for their own account. Their historical success is supported by the fact that 58% of first-time clients have returned for additional services, the scope of which expanded by 60x. Specific projects have included master plans for Lionsgate Zone in Dubai, U.A.E. and Atlantis Sanya in Hainan Island, China. Attractions and experiential destinations have included Hulk Epsilon Base 3D in Dubai, U.A.E. and Kennedy Space Center Heroes & Legends in FL, USA. Captivating media projects have included Become Jane: The Evolution of Jane Goodall, in Washington, DC, and Halo: OutPost Discovery which toured across the USA. Experiential Restaurant and Retail developments have included Finn & Jake’s Everything Burrito and Marvel Vault Store, both at the IMG Worlds of Adventure Theme Park in Dubai. FBY’s award winning technology includes experiences such as Spheron, CurcuMotion, Falcon’s Vision AR Headset, the GameSuite gameplay ecosystem, Suspended Theater, SpectraVerse, ONIX Theatre, and AEONXP technology. In the course of developing the above projects and technology, multiple patents have been granted in more than a dozen countries. Below are links to short video presentations for just a few of the just named projects.


(point & click, point & click on link)

https://vimeo.com/227291407  “IMG” Worlds of Adventure, Dubai –

https://vimeo.com/372003261 – Halo: Outpost Discovery

https://vimeo.com/477784289 – Gamesuite ecosystem

https://vimeo.com/111864378 – Suspended Theatre

                Current projects:

As shown in the first chart below, Falcon’s Creative is finalizing the full concept master plans for five “third party” theme parks, estimated to amount to $655M of goods and services, in addition to about $100M relative to the JV with Melia’.  Applying the estimated gross margin of 30-35% to services and 17-18% to hardware, the total gross margin (at the midpoint) would be $158M. Based on the timeline shown on the chart just above, one fifth of that would be about $32M of annual gross margin generated for Falcon’s.

Not shown below, Falcon’s is also actively developing the pre-concept master plans for three unique theme parks, as well as the full concept design for nine specialty themed hotels, each of which can generate subsequent phases of design.

There is continuing support of Qiddiya, one of a series of giga-projects in Saudi Arabia, designed to consist of 367 square kilometers of family friendly theme parks, sports arenas (suitable for int’l competitions), academies for sports and the arts, concert and entertainment venues, motorsport racetracks and nature/environmental adventure activities. To date, for Qiddia Falcon’s Creative has led the design of 26 distinct entertainment assets ranging from hotels to theme parks. This has also included the design of the region’s largest water theme park, spanning 252,000 square meters and combining 22 wet and dry attractions alongside competition level water sports facilities. Falcon’s is also now supporting the project in the role of creative guardian as construction advances.

Creative (as a segment of Falcon’s Beyond) is operating, safe to say, with a substantial positive cash flow. Subject to the timing of individual projects, the Creative segment of daily activities seems capable of generating something like $25-35MM of annual EBITDA. That should contribute substantially to the asset building brick and mortar activities with Melia’ and otherwise, as well as support the asset light activities of Falcon’s Brands.

Falcon’s Beyond Destination is currently comprised of the hotel and Katmandu theme park in Mallorca, with three 50-50 projects under way. The hotels, contributed by Melia’ and the Katmandu parks built and financed by Falcon’s, will be part of the 50-50 joint venture. Falcon’s Central the adjacent retail, dining and entertainment venue will be built, operated and 100% owned by Falcon’s.

The model for the Falcon’s Destination/Melia’ Joint Venture was the Sol Katmandu Park and Resort in Mallorca, Spain, the park having been established in 2007, whose performance improved substantially after merging with the adjacent Melia’ hotel in 2012, complemented by the Falcon’s designed Katmandu compact theme park.  The design of this combined “entertainment with rooms” destination makes it convenient for guests to visit throughout the day and evening. Falcon’s developed stories, characters and environments to transport guests to Katmandu via immersive theming from entry through queues into each attraction.  The theme park, prior to COVID, averaged over 240,000 visitors per year, generated in only seven months per year. The hotel’s average occupancy was 77%, 6 points better than non-Katmandu hotels in Mallorca, with an average room rate of $154, 11% higher than non-Katmandu rooms.

The improvement in Mallorca, and the working relationship between Falcon’s Chairman, Scott Demerau, with Melia’ encouraged the formation of the JV. Melia’ has more than 350 resort and beach destinations across over 40 countries. Scott Demerau’s team has the theme park operating experience, and Cecil Magpuri leads the Creative production of a leading-edge entertainment experience. Melia’, by contributing an existing hotel to the JV, is betting that their 50% of the theme park (which Falcon’s is building) plus their 50% of the improved hotel cash flow, with higher room rates and occupancy, plus more business at other properties they may own in the area, will be more than their current cash flow from the hotel.  Falcon’s is getting access to premium resort real estate owned by Melia’ that would be largely untouchable at today’s values. Both Melia’ and Falcon’s will benefit from Melia’s long term banking relationships, in addition to Falcon’s new access to US capital markets.

As the charts below from the Investor Presentation show: Within the joint venture are the Mallorca Sol Hotel and Katmandu theme park, plus the hotels and theme parks in Punta Cana (Dominican Republic, Tenerife (Canary Islands) and Playa del Carmen (Mexico).  It should be noted that all are year-round tourist locations, 3.5M annually in Punta Cana, 8.4M in Tenerife and 12.5M in Playa del Carmen (excluding cruise ship visitors).

By mid-2025 the joint venture expects to own and operate four destination resorts with over 1,900 hotel rooms, four theme parks, and three 100% owned retail districts. As shown below, the capitalized value of this brick-and-mortar portfolio could approximate the initial valuation of the deal, possibly more. Primary monetization of these developments will consist of hotel bookings, entertainment ticket sales, retail & food & beverage sales, and management fees.

Joint Venture Economics

The Joint Venture, once all three new locations are opened and ramped, is expected to generate, after capex, about $125M of annual Cash Flow. Falcon Beyond’s 50% share would be about $63M, as shown in the chart below. We note the reference on the left “we expect to take advantage of Melia’ longstanding banking relationship to secure attractive banking terms.” Leverage is calculated at 40-45% loan-value, which generates a 37% pretax return on equity for Falcon’s Beyond. The calculation, as shown in the Investor Presentation is just below:

              Falcon Central – the concept and the economics

Falcon’s Central is the “signature” venue at the center of the theme park, merging retail, dining and entertainment. Guests are exposed to a multitude of entertainment experiences, amenities, IP content and merchandise. Dining experiences are offered both from local restaurants as well as newly developed concepts. The shopping district offers both local and global retailers showcasing varied IP-infused merchandise. Attractions featured at Falcon’s Central will be VQUARIUM, a virtual adventure, STORY HUB, an immersive location-based entertainment experience, CURIOSITY PLAYGROUND, an experiential edutainment venue, and GAMEHUB, an immersive video game experience.


The chart, as presented in the Investor Presentation, shows Falcon Central’s Cash Flow, after capex and interest, from the three new locations amounting to $44M, generating a 36% pre-tax return on equity. Once again, as with the theme park development, Melia’ banking relationships are expected to be instrumental (Borrowing $96M out of $217M initial investment).

      Total Hard Asset EBITDA Generation (and capitalized Value)– at  mid-’25 Run Rate

As described in the discussion above:

When the three new locations are completely opened by mid-2025, the Joint Venture with Melia’ is expected to be annualizing (for Falcon’s Beyond) EBITDA at $73M, before maintenance capex of $5.5M. Falcon’s Central (100% owned) is expected to be annualizing at $53M before maintenance capex of $5M capex.  The EBITDA annualized run rate on “hard assets”, after maintenance capex, is therefore expected to be about $118M. The difference between that and the $146-$156M of total EBITDA is expected to be generated by Falcon’s Creative, which appears reasonable based on the backlog of projects and the commensurate margins.

Capitalized Asset Value

Cash flow generation obviously has a value, depending on the reliability of the cash flow, and the cap rate provided by capital markets. The following table shows the calculation behind an asset value of $954M to $1.451B, depending on cap rate.

Falcon’s Brands – Last but Far from Least – the Asset Light “Kicker”

Falcon’s Brands will deploy and monetize owned and partnered brands. The unique brand expander strategy compresses the normal timeline for brand monetization, will do so across multiple venues, and include licensing agreements across outside channels.

This effort is led by both internal talent, and outside advisors including Board members. It will include multi-media story telling by way of social media, films, books, comics, gaming, VR, apps, music, podcasts, audio books, etc. Consumer products will also be developed, enabling rapid monetization of IP with minimal investment. FBY’s technical expertise will align with prominent global partners to distribute toys, games, apparel, collectables, electronics and published goods.

Distribution can take place through brick and mortal retailers, online direct to consumer, as well as in 3rd party marketplaces.  A variety of characters and universes are already in the library of brands within Falcon’s.

A number of strategic partnerships with leading developers and distributors of brands are already in place to jumpstart this effort. The synergistic effect of FBY’s three divisions should be noted, since each project done well by a particular segment builds long term value for the others.

Falcon’s Beyond Brands is expected to be, over the long term,   a one third contributor to total corporate EBITDA, equal to each of Creative and Destinations.


The following chart from the Investor Presentation provides a summary of cash coming and going between the Business Combination (estimated at year end ’22) and mid-2025. It shows cash provided by the SPAC ($222M), Private Placement from Falcon’s affiliate ($60M), Secured Term Debt of Falcon’s Central ($96M) and Cash Flow from Operations (Creative and Destinations) ($110M). Outflow includes Transaction expenses ($46M), Falcon’s contributions to JV ($161M), Falcon’s Central capex ($ 217M). There is a $63M “cushion” to allow for SPAC redemptions.

Adjustments to financial plans, for better or worse, are always a possibility. Good news is not of concern to investors but, in consideration of possible short-term disappointment:  should redemptions amount to more than expected, projects open late or do less well than expected, or financing not be available as planned, the positive current operating cash flow from Creative would allow for adjustments in timing, rather than elimination, of future projects. The predictable positive operating run rate would also buy time to arrange alternative financing for brick-and-mortar projects. While short-term results could be affected, longer term plans would (hopefully) remain intact.


The following chart summarizes the transaction. We have written before, and above, about the improvements in comparison to a typical SPAC structure. Most notable is (1) The starting valuation is a modest 6.7x projected annualized EBITDA in about 2.5 years.  (2) The current operating cash is presumably positive. (3) Principals within the company to be purchased are staying, owning over 80% of the new company, and investing (through an affiliate) an additional $60M. (4) Sponsors are giving up 20% of their inexpensive shares. (5) SPAC investors remaining will receive an 8% preferred stock for half their shares. (5) Earnout shares will not be issued for at least a year and when the stock is $20, $25, and $30/share. (6) Sponsor, affiliates and board members are well equipped to provide strategic guidance.


The charts below, from the Investor Presentation, show how reasonably valued Falcon’s is, based on the growth rate, EBITDA margins, and mid-2025 projected EBITDA. These numbers, to us, are mostly illustrative of the substantial re-rating possibilities for Falcon’s stock if and when they have produced the results as projected.

CONCLUSION: As provided above

We have more to learn, from the S-4 when filed and our further research, but it seems at this point that success is more a question of how much and when, rather than if. The professionals at Falcon’s Beyond are not being asked to do anything they haven’t done before. A billion dollars is a significant starting valuation, but the ROI on over $200M of SPAC proceeds, invested productively in brick & mortar projects, and the earnings power at the Creative division should support a good portion of that.  Moreover, the value of Falcon’s 50% portion of just the first few projects with Melia’ Hotels could approximate the initial $1B valuation.  Longer term, more Destination projects with Melia’ and others, expanded Creative business with Qiddiya and others, and Brands could combine to double the projected mid-2025 EBITDA of $150M by ’27-’28. It is a crucial consideration that current Creative operations are cash flow positive, available for the development of brick & mortar assets. This feature, along with the banking relationships of Melia’, should allow for growth as planned, even without a broad vote of confidence from current FZT shareholders. The possibility of $150M annualized EBITDA in only about 2.5 years, combined with the potential to build billions of value attached to brick-and-mortar assets makes the current $1B starting point appear reasonable. Precise timing of events is always uncertain, and the degree of success cannot be assured, but the intellectual, physical and financial assets seem to be in place. While, per Yogi Berra, “Predictions are always difficult, especially about the future.”, uniquely positioned Falcon’s Beyond provides an unusually attractive investment proposition.

Roger Lipton













The excitement in the marketplace relative to SPACs (Special Purpose Acquisition Corporations), as evidenced by the chart shown just below, has clearly abated (as we have repeatedly suggested over the last six months).


Readers can find more extensive discussions about the individual situations discussed below by using the SEARCH function on our Home Page.


Of the restaurant related SPACs:

The only completed deal, BurgerFi (BFI), is trading almost 50% down from its high and below the $10 IPO price of the original SPAC.

Fast Acquisition Corp II (FZT), (USHG), Tastemaker (TMKR) and Bite (BITE), are sitting on a total of almost one billion dollars (which can be leveraged), are looking for deals at an acceptable price, and one that will excite the shareholder base that has to approve the transaction. However, with the stock price below the $10 IPO level, the opportunity must be compelling, or the shareholders will choose to redeem their ($10/share) funding.

Do It Again (DOITU) and Sizzle (SZZLU) have yet to be funded.

Only Fast Acquisition Corp (FST) is trading above the IPO price, about 20% higher, with the Fertitta deal pending. Even here a great deal can happen in the marketplace by the time the SEC approves the proxy material and the shareholders vote.

Bottom Line: SPACs have been very productive for some, but, as usual, the “early adopters” will have been most fortunate. Later participants are finding that the process is riskier (because Sponsors have to fund the SPACs organizational expenses), the IPO process takes longer, the search process is tedious (especially when competing with many other bidders), and the business combination may or may not be approved by shareholders. Even then, long term success is not assured and the liquidity process for Sponsors is not always easy. Some Sponsors and SPAC investors will do just fine, and they likely will have earned it.

Roger Lipton