Attitash Mountain Resort in New Hampshire is one of the 17 resorts Vail Resorts is acquiring in its stock purchase.
BROOMFIELD, Colo. — Vail Resorts announced Monday, July 22, that it has entered into an agreement to acquire Peak Resorts Inc.
The deal, valued at approximately $264 million, will bring 17 additional ski areas into the Vail Resorts portfolio, according to a press release.
The deal is subject to conditions, including regulatory review and approval by Peak Resorts' shareholders. The transaction was approved by both companies' boards of directors. Peak's board has recommended that the company's shareholders approve the transaction.
If approved, the deal would give Vail — which owns three resorts in the Lake Tahoe/Northern Nevada area (Kirkwood, Heavenly and Northstar) and at least 17 other ski areas across the globe, according to a 2019 investor presentation — an expanded foothold on the East Coast and in the Midwest.
Peak Resorts properties include:
Once the transaction closes, the 2019-20 Epic Pass, Epic Local Pass and Military Epic Pass will include unlimited and unrestricted access to the Peak ski areas, according to Vail. Guests with an Epic Day Pass will be able to access the new ski areas as a part of the total number of days purchased.
Vail Resorts will honor and continue to sell all Peak Resorts pass products during the 2019-20 season. Peak pass holders will have the option to upgrade to an Epic Pass or Epic Local Pass once the transaction closes.
“The ski areas within the Peak Resorts portfolio exemplify the spirit of our sport as well as our Company's mission to provide an 'Experience of a Lifetime' to guests,” Rob Katz, chairman and CEO of Vail Resorts, said in a press release. “We're thrilled to welcome the resorts and their employees into the Vail Resorts family and invest in their continued success.”
At a valuation of $11 per share, the total transaction is expected to cost approximately $264 million. Vail intends to finance the acquisition through a combination of cash on hand, its existing revolver facility and an expansion of its existing credit facility.
Additionally, Vail Resorts will be assuming or refinancing Peak Resorts' outstanding debt.
“Vail Resorts has a proven track record of celebrating the unique identity of its resorts, while continually investing in the guest and employee experience. For this reason, we are confident that our resorts and employees will continue to thrive within the Vail Resorts network,” Timothy Boyd, president and CEO of Peak Resorts, said in the press release. “We are very proud of our track record over the last two decades in building the breadth, quality and accessibility of our resorts. We are thrilled that our guests will now have access to some of the world's most renowned resorts.”
The transaction is expected to close this fall, according to Vail. Operations at all Peak ski areas are expected to continue in the ordinary course of business.
Vail said it plans to retain the vast majority of each resort's employees once the deal closes.
The acquisition is expected to generate incremental annual EBITDA (earnings before interest, tax, depreciation and amortization) of approximately $60 million in Vail Resorts' fiscal year ending July 31, 2021.
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.
Vail Resorts' annual ongoing capital expenditures are expected to increase by $10 million to support the addition of the Peak Resorts ski areas, according to Vail, which plans to invest approximately $15 million over the next two years in one-time capital spending to elevate the guest experience at these resorts.
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