Vail Resorts, Inc. announced it has entered into a definitive merger agreement to acquire 100% of Peak Resorts, Inc. at a purchase price of $11.00 per share, subject to certain conditions, including regulatory review and the approval of Peak Resorts' shareholders.
This adds 17 U.S. ski areas to Vail's network of resorts, doubling the current 17 to 34. All of these resorts are located near major metropolitan areas, including New York, Boston, Washington, D.C., Baltimore, Philadelphia, Cleveland, Columbus, St. Louis, Kansas City, and Louisville.
The resorts are: Mount Snow in Vermont; Hunter Mountain in New York; Attitash, Wildcat, and Crotched Mountains in New Hampshire; Liberty Mountain Resort, Roundtop Mountain Resort, Whitetail Resort, Jack Frost, and Big Boulder in Pennsylvania; Alpine Valley Boston Mills, Brandywine, and Mad River Mountain in Ohio; Hidden Valley and Snow Creek in Missouri; and Paoli Peaks in Indiana.
A number of these resorts already have bike parks and Vail Resorts owns other bike park resorts, including Whistler B.C., Keystone, and Northstar.
When the transaction closes, the 2019-20 Epic Pass, Epic Local Pass and Military Epic Pass will include unlimited and unrestricted access to the 17 Peak Resorts ski areas. Guests with an Epic Day Pass will also be able to access the new ski areas as a part of the total number of days purchased. For the 2019-20 season, Vail Resorts will honor and continue to sell all Peak Resorts pass products, and Peak Resorts’ pass holders will have the option to upgrade to an Epic Pass or Epic Local Pass, following closing of the transaction.
Additional Transaction Details:
The aggregate purchase price for all Peak Resorts common stock is estimated to be approximately $264 million (calculated on a treasury method basis), which Vail Resorts intends to finance through a combination of cash on hand, its existing revolver facility and an expansion of its existing credit facility. In addition, Vail Resorts will be assuming or refinancing Peak Resorts’ outstanding debt.
The acquisition is expected to generate incremental annual EBITDA of approximately $60 million in Vail Resorts’ fiscal year ending July 31, 2021, the first fiscal year with the full benefit of the synergies of the acquisition, with additional revenue upside in future years. Synergies are expected to come from additional revenue across the Vail Resorts network of resorts and cost reductions from the elimination of certain duplicative administrative functions and greater efficiencies brought by Vail Resorts’ size and scale. Vail Resorts’ annual ongoing capital expenditures are expected to increase by $10 million to support the addition of the Peak Resorts ski areas. After closing of the transaction, Vail Resorts plans to invest approximately $15 million over the next two years in one-time capital spending to elevate the guest experience at these resorts.
The transaction was approved by both companies’ Boards of Directors, and the Peak Resorts Board of Directors also recommends that Peak Resorts’ shareholders approve the transaction.
The transaction is expected to close this fall. The parties expect operations at all Peak Resorts ski areas to continue in the ordinary course of business. Upon closing, Vail Resorts plans to retain the vast majority of each resort’s employees.
Additional details can be found on Vail Resorts
and Peak Resorts