PEAK is Epic
[url="https://www.epicpass.com/info/peak-resorts-release.aspx[/url]
BROOMFIELD, Colo.—July 22, 2019—Vail Resorts, Inc. (NYSE: MTN) today announced it has entered into a definitive merger agreement to acquire 100 percent of the outstanding stock of Peak Resorts, Inc. (NASDAQ: SKIS) at a purchase price of $11.00 per share, subject to certain conditions, including regulatory review and Peak Resorts’ shareholder approval.
Through the acquisition, Vail Resorts will add 17 U.S. ski areas to its network of world-class resorts. Located near major metropolitan areas, including New York, Boston, Washington, D.C., Baltimore, Philadelphia, Cleveland, Columbus, St. Louis, Kansas City and Louisville, the resorts include:
“We are incredibly excited to have the opportunity to add such a powerful network of ski areas to our Company,” said Rob Katz, chairman and chief executive officer of Vail Resorts. “Peak Resorts’ ski areas in the Northeast are a perfect complement to our existing resorts and together will provide a very compelling offering to our guests in New York and Boston. 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. The acquisition fully embodies our philosophy of Epic for Everyone, making skiing and riding more accessible to guests across the U.S. and around the world.”
“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,” Katz continued. “We’re thrilled to welcome the resorts and their employees into the Vail Resorts family and invest in their continued success.”
“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,” said Timothy Boyd, president and chief executive officer of Peak Resorts. “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.”
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.
BROOMFIELD, Colo.—July 22, 2019—Vail Resorts, Inc. (NYSE: MTN) today announced it has entered into a definitive merger agreement to acquire 100 percent of the outstanding stock of Peak Resorts, Inc. (NASDAQ: SKIS) at a purchase price of $11.00 per share, subject to certain conditions, including regulatory review and Peak Resorts’ shareholder approval.
Through the acquisition, Vail Resorts will add 17 U.S. ski areas to its network of world-class resorts. Located near major metropolitan areas, including New York, Boston, Washington, D.C., Baltimore, Philadelphia, Cleveland, Columbus, St. Louis, Kansas City and Louisville, the resorts include:
- Mount Snow in Vermont
- Hunter Mountain in New York
- Attitash Mountain Resort, Wildcat Mountain and Crotched Mountain 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
- Paoli Peaks in Indiana
“We are incredibly excited to have the opportunity to add such a powerful network of ski areas to our Company,” said Rob Katz, chairman and chief executive officer of Vail Resorts. “Peak Resorts’ ski areas in the Northeast are a perfect complement to our existing resorts and together will provide a very compelling offering to our guests in New York and Boston. 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. The acquisition fully embodies our philosophy of Epic for Everyone, making skiing and riding more accessible to guests across the U.S. and around the world.”
“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,” Katz continued. “We’re thrilled to welcome the resorts and their employees into the Vail Resorts family and invest in their continued success.”
“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,” said Timothy Boyd, president and chief executive officer of Peak Resorts. “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.”
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.
Comments
Hopefully the ASC lessons have been learned.
However, I have a vested interest in how this will change Crotched Mountain - not only as a ski area, but how management will change with respect to both Snow Sports Instructors and Patrolmen.
"The bigger they are, the harder they fall"
Too big to Vail.
Until CM's vertical drop doubles, I wouldn't count on a commensurate increase in property values.
I don't see them doubling, but to put their low prices in perspective: You can still buy units on the mountain for less the they sold for in 1986. In other words, I think they are currently underpriced.
I just took my profit
I was under the impression that Peak had turned the corner and was expecting the stock to continue its upswing. Just didn't expect it to be this quick!
Now I gotta look at the Epic® pass...
Peaks only charged tax at MS, thus I've been buying my pass elsewhere for ages. Jack Frost for next year.
I do not see the wonderful advantage of an EPIC pass. For $52 I get a season pass at Smuggs, good any day, and for $125 I get a season pass at Sugarbush/ Mt. Ellen good any non-holiday Monday thru Friday. Either thru Liftopia, or the New England Ride and Ski card, or from the individual mountains themselves, there are various one day deals for very reasonable prices, which I can decide on a few days before going there.
Compare all of that to having to shell out $700 +++ for the various Epic passes, and it does not sound so inviting!
Stowe (before acquisition by Vail) used to offer all sorts of discounts and deals. Now it comes out to about $100/ day, unless you want to spend your whole season just skiing Stowe (and I don't). I am very fearful that the same thing will now be true for Okemo and Sunapee, with the upcoming season being the first full on under Vail ownership. Goodbye local deals for Mt. Snow, Hunter, Attitash, Wildcat and Crotched.
It is a simple economic truth that competition helps keep prices down, and stirs up innovation. Limited competition does the opposite. Just look at what has happened to the airline industry, now that there are only a few airlines left. I'm afraid that the same thing will be happening to the ski industry.
Agreed. (Except the 40 days, I get about 25) I think the same thing will happen here as happened in Summit County, those of us who ski a few times each season at Wildcat or Sneaux will find that the numbers make sense if we buy a pass, and then the liftlines will be off the charts.
Let's say I can do a dozen days between the various eastern properties. It would work out to about $58/day, which, considering a couple of those would be Jack Frost, and I would then pick Hunter over something, it's kind of meh.
But let's say I go to Park City and subtract the cost of two days there at the deepest discounted price, then I divide the remaining Epic Local cost by 12, now it's about $40 per day in the east. That's tough to beat, considering a day here and there at Okemo, Mount Snow, Stowe, etc.
Question is, what will happen to the prices NEXT year. And parking prices, let's not forget those. I think Aldee's analogy of the airlines might be on target. You can have a semi-decent experience and pay for every aspect of it, or a hit-or-miss experience at a discount airline.
I also think that little town in Missouri that keeps giving Peaks a hard time is going to find themselves battling a heavier opponent.
My friends who are regular Stowe season pass holders had their season pass price go down by 60% when Vail took over. The entire industry seems to be going to "Amusement Park Pricing": Pay through the nose for 1-day, but if you're doing 4 or more days, the season-pass breaks even and by the time you get to day 40, the per day cost is less than $20 a day.
thesnowway.com
As a former Vail employee living here in Vermont I could not agree more ......screw vail
Ya we thought that here in Vermont and it was a no go.....this is nothing but bad news for skiers who don't travel like 99% of Ski Roundtop customers.....its basically a screwing. I really feel bad for Snow time employees who will see a lot of changes ....none for the good.
It's scary as a member of the industry. I'm working lifts at Sugarbush this summer but have been away for a couple of weeks. I am sure it's going to be a hot topic of conversation for a while with a lot of speculation.
Stratton is Alterra (via Intrawest purchase).
Smuggs, Suicide Six, Cochran’s, Middlebury Snow Bowl, and some small tow areas are independent.
Also note that Killington is owned by Powdr, and Bromley is operated by Fairbanks Group. Though in both cases far from Vail or Alterra.
Also I would Hazard a guess that when Jay is sold it’s not to an independent operator.
Don’t forget that Stratton is Alterra.