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Vail to skate off with Peak Resorts
Posted on Monday, 22 July 2019 14:07
Vail Resorts is acquiring US-based ski resort Peak Resorts for USD 264.00 million, including the assumption of debt.
The buyer is offering USD 11.00 per share in cash, representing a premium of 155.7 per cent to the target’s close of USD 5.10 on 19th July, the last trading day prior to the deal being announced.
Vail will fund the purchase through a combination of cash on hand and its existing credit facility.
The transaction, which has been approved by both companies’ board of directors, is slated to close in autumn 2020, subject to regulatory and shareholder approval.
Vail plans to retain the majority of the target’s employees from each ski park upon completion.
Headquartered in Missouri, Peak Resorts operates 17 ski resorts across the Northeast and Midwest of the US, including New York, Boston, Baltimore and Philadelphia.
Its sites comprise nearly 1,890 acres of terrain and features activities and services such as snowboarding, tubing, equipment rentals and mountain biking.
For the financial year ended 30th April 2019, Peak Resorts booked revenue of USD 184.43 million, up 40.1 per cent from USD 131.66 million in the corresponding period of 2018.
The deal is expected to generate incremental annual earnings before interest, taxes, depreciation and amortisation of around USD 60.00 million for Vail’s fiscal year ending 31st July 2021.
Furthermore, the buyer’s yearly ongoing capital expenditures are projected to increase by USD 10.00 million to help support the addition of the target’s ski resorts.
Upon closing, Vail also plans to invest approximately USD 15.00 million over a two-year period in one-time capital spending to improve customer experiences.
Following the completion of the deal, the buyer’s visitors will be able to access all of Peak Resort’s 17 ski areas through the 2019-20 epic, local and military epic passes.
Rob Katz, chief executive of the purchaser, said: “With this acquisition, we are also able to make a much stronger connection to guests in critical cities in the Mid-Atlantic and Midwest and build on the success we have already seen with our strategy in Chicago, Minneapolis and Detroit.”
He added that the transaction also compliments the group’s plans to make skiing and riding more accessible to customers in the US and worldwide.
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