“We are incredibly excited to have the opportunity to add such a powerful network of ski areas to our company. 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.” – Vail Resorts Chairman & CEO Rob Katz
Yahoo Finance reports shares of Vail Resorts (NYSE: MTN) climbed 10.5% in July, according to data from S&P Global Market Intelligence. This bump in value came after the mountain resort operator revealed it has agreed to acquire fellow resort leader Peak Resorts(NASDAQ: SKIS) for $11 per share. The total purchase price was roughly $264 million using a combination of cash and debt.
Vail Resorts operates 17 mountain resorts and three urban ski areas but the purchase of Peak Resorts will bring 17 additional ski resorts under Vail’s umbrella, primarily located in the Northeast, Mid-Atlantic, and Midwest regions.
Peak Resorts should generate incremental EBITDA of roughly $60 million in Vail’s fiscal year ending July 31, 2021. Synergies from the acquisition are expected to manifest in new revenue opportunities, cost reductions, and the greater efficiency of Vail Resorts’ larger scale. Vail predicts “additional revenue upside in future years.”
The purchase of Peak Resorts isn’t a done deal yet. They need to secure the approval of both regulators and Peak Resorts’ shareholders before they proceed but if all goes as planned, Vail anticipates the ink will be dry on the deal by this fall.