Peak Resorts buys Hunter for 36 Million

DrJeffDrJeff advanced
http://ir.peakresorts.com/File/Index?KeyFile=32073446

The Nor'easter Pass now becomes quite interesting for the SW CT, downstate NY, Jersey and even some of Eastern PA!

Guess this also ends the Peak/Saddleback rumors!!

Comments

  • rickbolgerrickbolger expert
    edited November 2015 Posts: 953
    Huntah!   I didn't think Saddleback was in the mix...my money was on Elk.  Wow...this is something!  

    Boyd said they'll have passholder "reciprocal programs" in place for this season


  • NELSBEERNELSBEER advanced
    edited December 2015 Posts: 200
    Here's the press release...

    Peak Resorts adds Premier New York Ski Area to Resort Portfolio
    Investor Call/Webcast to Discuss Transaction Scheduled for 5:30pm ET WILDWOOD, Mo., Nov. 30, 2015 (GLOBE NEWSWIRE) -- Peak Resorts, Inc. (NASDAQ:SKIS), a leading owner and operator of high-quality, individually branded ski resorts in the U.S., today announced it has entered into an agreement to purchase Hunter Mountain, the Catskills' premier winter resort destination, for cash consideration of $35 million plus the assumption of two capital leases estimated at approximately $1.8 million. Hunter Mountain generates approximately $27 million (unaudited) in annual revenue. The purchase price is slightly more than six times Hunter Mountain's adjusted EBITDA, which is estimated at approximately $6 million (unaudited) for its fiscal year ended April 30, 2015. Peak Resorts currently has preliminary lender commitments for a first mortgage of approximately $20 million, which would be secured by Hunter Mountain assets. The remainder of the cash requirement is expected to be funded by tapping the line of credit the company announced in October 2015. Peak Resorts expects to complete the purchase of Hunter Mountain by year-end 2015. Timothy D. Boyd, president and chief executive officer, said, "Hunter Mountain, under the stewardship of the Slutzky families, has become one of the iconic ski resorts in the Northeastern United States. Its reputation as one of the premier snowmaking resorts in the East makes it a perfect fit for our portfolio and strategy. We look forward to continuing the rich tradition the Slutzky families have built. "Our roadmap for growth calls for a mix of organic growth and resort development as well as acquisitions that will let us build our portfolio of ski resorts in the attractive overnight and day-drive segments of the market. We expect this transaction will be accretive to Peak Resorts' Reported EBITDA in the third quarter of fiscal 2016 and we will continue to evaluate other potential value-add acquisitions," Boyd noted. Boyd added, "Over the summer, Hunter Mountain completed a variety of capital improvement projects to enhance the ski experience. Among the projects were a $1.2 million investment in new snow guns and a $500,000 investment in a state-of-the-art compressor to improve snow-making efficiency. In addition, the resort made trail improvements and expanded its Race Foundation facility." Boyd concluded, "Peak Resorts is set to become the preeminent ski operator in the metro New York-area with the addition of Hunter Mountain to our portfolio of resorts in New Hampshire, Vermont and Pennsylvania. For this 2015-2016 ski season, we are planning to offer reciprocal programs among the resorts for the season passholders at Hunter Mountain and our current properties. Program details will be available by phone or in person, and also will be posted on the websites for each of the resorts in the coming weeks."
    About Hunter Mountain The Hunter Mountain resort includes three separate mountains catering to skiers and riders of all ability levels along with several terrain parks and an all-ages tubing park. The Slutzky families founded the resort in the 1950s and have been integral to its success. In addition, the resort offers a full complement of ski school programs, overnight/four-season accommodations, a variety of dining options, a conference and corporate event facilities, a members-only lounge and a retail center. Hunter Mountain offers a variety of summer outdoor activities including a zipline with views of the Catskill Mountains. The resort also hosts festivals and concerts throughout the warmer months. The resort is located just over two hours by car from New York City and four hours by car from Philadelphia. Hunter Mountain has a base elevation of 1,600 ft., summit elevation of 3,200 ft. and a vertical drop of 1,600 ft. There are 240 skiable acres with 58 trails and 12 lifts. The terrain is divided 30 percent Beginner, 30 percent Intermediate, 27 percent Advanced and 13 percent Expert. Additional information on Hunter Mountain's facilities is available at http://www.huntermtn.com
  • NELSBEERNELSBEER advanced
    Posts: 200
    There was an investor conference call this evening which provided the asking of questions about the deal. It will be available on the Peak Resorts website shortly for replay.

    Items of interest, this is not the end of acquisitions, they are always looking for opportunities. So let your speculation continue. But they won't give out any clues.

    Mentioned that there might be a secondary offering of Peak Stock {SKIS on NASDAQ}.

    No one guessed this one!
  • obienickobienick expert
    Posts: 783
    Hunter. Huh.  Was not expecting that one.

    This should be a great move for Peaks.  This will be a second cash cow for them with little if any investment necessary (great snowmaking, 2 HS lifts).
  • njskibabenjskibabe intermediate
    Posts: 76
    Wow! I didn't see that one coming.
  • TomWhiteTomWhite advanced
    Posts: 355

    This format works...most of the ropeways article.


    ropeways.net | Home | 2015-12-01

    PEAK RESORTS TO ACQUIRE HUNTER MOUNTAIN FOR $36.8 MILLION

    ADDS PREMIER NEW YORK SKI AREA TO RESORT PORTFOLIO
     
    Peak Resorts to Acquire Hunter Mountain for $36.8 Million
    Adds Premier New York Ski Area to Resort Portfolio
    Investor Call/Webcast to Discuss Transaction Scheduled for 5:30pm ET
     
    WILDWOOD,-- Peak Resorts, Inc., a leading owner and operator of high-quality, individually branded ski resorts in the U.S., today announced it has entered into an agreement to purchase Hunter Mountain, the Catskills' premier winter resort destination, for cash consideration of $35 million plus the assumption of two capital leases estimated at approximately $1.8 million. Hunter Mountain generates approximately $27 million (unaudited) in annual revenue. The purchase price is slightly more than six times Hunter Mountain’s adjusted EBITDA, which is estimated at approximately $6 million (unaudited) for its fiscal year ended April 30, 2015.
     
    Peak Resorts currently has preliminary lender commitments for a first mortgage of approximately $20 million, which would be secured by Hunter Mountain assets. The remainder of the cash requirement is expected to be funded by tapping the line of credit the company announced in October 2015. Peak Resorts expects to complete the purchase of Hunter Mountain by year-end 2015.
     
    Timothy D. Boyd, president and chief executive officer, said, “Hunter Mountain, under the stewardship of the Slutzky families, has become one of the iconic ski resorts in the Northeastern United States. Its reputation as one of the premier snowmaking resorts in the East makes it a perfect fit for our portfolio and strategy. We look forward to continuing the rich tradition the Slutzky families have built.
     
    “Our roadmap for growth calls for a mix of organic growth and resort development as well as acquisitions that will let us build our portfolio of ski resorts in the attractive overnight and day-drive segments of the market. We expect this transaction will be accretive to Peak Resorts’ Reported EBITDA in the third quarter of fiscal 2016 and we will continue to evaluate other potential value-add acquisitions,” Boyd noted.
     
    Boyd added, “Over the summer, Hunter Mountain completed a variety of capital improvement projects to enhance the ski experience. Among the projects were a $1.2 million investment in new snow guns and a $500,000 investment in a state-of-the-art compressor to improve snow-making efficiency. In addition, the resort made trail improvements and expanded its Race Foundation facility.”
     
    Boyd concluded, “Peak Resorts is set to become the preeminent ski operator in the metro New York-area with the addition of Hunter Mountain to our portfolio of resorts in New Hampshire, Vermont and Pennsylvania. For this 2015-2016 ski season, we are planning to offer reciprocal programs among the resorts for the season passholders at Hunter Mountain and our current properties. Program details will be available by phone or in person, and also will be posted on the websites for each of the resorts in the coming weeks.”

  • newpylongnewpylong advanced
    Posts: 451
    Good move for everyone I think.
  • NELSBEERNELSBEER advanced
    edited December 2015 Posts: 200
    Thanks for the tip, I couldn't figure out how to get the formatting out.

    A little more information from the Investor call at 5:30 last night.

    Peaks' due diligence at Hunter did not include sitting down with staff and going through their perceptions of what may be needed due to confidentiality considerations; so don't expect much change this year. Peak expects to take a year or two to assess what exists and determine how to move forward. Maybe a Mount Snow type master plan will emerge?

    Typically Peak may make its presence felt quickly by fixing the obvious. E.g. at Mount Snow they paved the main pedestrian mall, cleaned up the bathrooms, put down a rubber composite floor and put in a few hundred fan guns.

    The financing is interesting. A majority of required funds will be on a conventional mortgage keeping costs somewhat lower than previous deals. The remainder will go on the line of credit for the short term. It looks like they have their financing in good order for this and any future deals that may arise. 

    Further details will be available on an 8-K filing in the near future.

     
  • DrJeffDrJeff advanced
    Posts: 263
    NELSBEER said:

    Thanks for the tip, I couldn't figure out how to get the formatting out.

    A little more information from the Investor call at 5:30 last night.

    Peaks' due diligence at Hunter did not include sitting down with staff and going through their perceptions of what may be needed due to confidentiality considerations; so don't expect much change this year. Peak expects to take a year or two to assess what exists and determine how to move forward. Maybe a Mount Snow type master plan will emerge?

    Typically Peak may make its presence felt quickly by fixing the obvious. E.g. at Mount Snow they paved the main pedestrian mall, cleaned up the bathrooms, put down a rubber composite floor and put in a few hundred fan guns.

    The financing is interesting. A majority of required funds will be on a conventional mortgage keeping costs somewhat lower than previous deals. The remainder will go on the line of credit for the short term. It looks like they have their financing in good order for this and any future deals that may arise. 

    Further details will be available on an 8-K filing in the near future.

     
    Yup.  That's what I would expect.  A few seasons with some "deferred maintenance" that encompasses projects that directly effect the snow quality for guests, and some aesthetic enhancements around the lodges and maybe a rebranding or 2 of a restaurant space.  

    Peak tends to be way more focused on trying to enhance an existing, established product, rather than completely re-inventing it
  • rickbolgerrickbolger expert
    edited December 2015 Posts: 953
    DrJeff said:

    Peak tends to be way more focused on trying to enhance an existing, established product, rather than completely re-inventing it
    Well said...and a good point why Saddleback wouldn't be on their radar; I suggest that it's still finding its way to being "established".

    Agree the recent bigger purchases have all been pretty good operations with tarnish in a couple cases. Particularly Mount Snow and Attitash. Although decent places they had a few warts from ASC neglect. Attitash was getting pretty tired at the end of the ASC reign.

    I wouldn't say Wildcat was tarnished, I think the Cat just needed some polish, and not much at that.

    Maybe Hunter is somewhere between ?

    Next up? Elk! ;)
  • hunterskier1hunterskier1 novice
    Posts: 2
    Hunter is an interesting case for Peaks.  In the past, say 5 years, the Slutsky family undoubtedly set the wheels in motion for this sale.  It is understandable the children just wanted to cash out on the success that Orville and Izzy created.  (Who can blame them?) When they installed the 6 pack and retrofitted and relocated the HSQ to the West-side, I knew a sale was coming.  Also, some of the real estate endevours such as creating a few new floors on the base lodge with condos, not to mention the monstrosity off to the right of the triple chair that holds RIP VAN WINKLE'S Restaurant and the addition of the learning center made the mountain more attractive to these corporations in the business of accumulating family-run mountains into their portfolios. 

    Besides the fact that I grew up about 25 minutes from Hunter, learned to ski, and later was a ski instructor there, Hunter has always been my favorite east coast ski area.  Now as an adult, I have not skied Hunter on a weekend in 10 years, usually just use a sick day here and there and ski an empty mountain on a TUES-WED-THURS.  While I always make two trips out west for a ski vacation, either Utah/Tahoe in January and always Vail in early April, I always loved Hunter for the fact that it is pretty much unchanged since I learned to ski there 28 years ago.  I'm in the minority, but I don't want Peaks to turn Hunter into the Ritz-Carlton.  I love the fact that the west side now has a HSQ.  I just hope they keep the mountain the way it is.  The only improvement that I would love to see is a terrain expansion into the bowl to make Hunter Mountain's summit actually Hunter Mountain. I know that is very unlikely as debated on this board hundreds of times over the years.   Here's to hoping Peak's acquisition will not be felt at all on the mountain. I'm old school and old school Hunter holds a special place in my heart just the way it is. If you ski Hunter on the weekends, you have no idea what you are missing.   Making laps of Cliff to racers on an empty sunny Tuesday morning is as good an Eastern Ski experience as one can find.   And its only 145 minutes from my driveway in Staten Island
  • obienickobienick expert
    edited December 2015 Posts: 783
    I imagine they'll do something like Carinthia for a big park situation, probably on Hunter One, in order to compete with Mountain Creek.

    Other than that I can't imagine they'd do many changes.  Maybe replace some of the old SMI Highland tower fan guns if they're still left/haven't been converted to PoleCats.
  • rickbolgerrickbolger expert
    edited December 2015 Posts: 953

     I always loved Hunter for the fact that it is pretty much unchanged since I learned to ski there 28 years ago.  


    I was told by a Hunter fan who skied there in the mid 1990s, then took about 20 years off from the sport. Went back last season, his impression was "it was pretty much like time stood still" and things looked a bit worn. Nothing bad really, just worn.

    Reminds me of what Attitash and Mount Snow we like about 6-7 years ago, things getting tired.

     I don't want Peaks to turn Hunter into the Ritz-Carlton. 
    Biggest difference you'll see is fresh paint, remodel here and there. I can almost guarantee there will be some efficiency-driven changes to things like ticket window location, traffic pattern for rental shop, that sort of thing. Your favorite secret spot where you used to boot up might become something else. Water fountain you used to use will be gone, but it's been replaced by a gleaming new one elsewhere. Eventually you'll see a building somewhere on the campus totally renovated or replaced.

    If there's an old lift that seems completely obsolete but you really love it, don't worry, as long as it works reliably it will probably be around for years to come.

    Peak Resorts ain't about the Deer Valley experience. You can pretty much glean from their messaging that they're catering to masses, not the elite.

    If Vail Resorts operates with a Type A personality, I think Peak Resorts is a lot more Type B.
  • TdizzTdizz novice
    Posts: 8
    My thought and hopes exactly. I just received an email from Hunter saying that Mount Snow will honor Hunter Mountain Season passes through December 18th (excluding Saturdays). That's pretty cool. Everyone is struggling this season here on the East. 
  • rgrwilcorgrwilco novice
    Posts: 2
    Jack frost/Big Boulder used to be my home hill. And Peak's management is absolutely fantastic. snowmaking and conditions are top priority and are usually the best in PA. Peaks actually promotes out of bounds riding at jack frost, and even built a stash style terrain park in one of their glades. I honestly cannot think of one negative thing, only positives, about this acquisition.

    Since Peak took over at JFBB, BB is usually the first to open and last to close in PA, sometimes riding lift served in early November well into May.


  • TdizzTdizz novice
    Posts: 8
    Oh that's really good to hear!
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