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Vail Resorts Completes Peak Resorts Buyout, Boosts Portfolio

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Vail Resorts, Inc. (MTN - Free Report) has completed the acquisition of Peak Resorts, Inc. for $11 per share. With the completion of this buyout, the company added 17 U.S. ski areas to its portfolio. The newly acquired resorts are located in the Northeast, Mid-Atlantic and the Midwest. Currently, the company has 37 owned and operated resorts worldwide.

In a bid to enhance guest experience at the newly acquired resorts, the company plans to invest nearly $15 million over the next two years. Per Vail Resorts, its annual ongoing capital expenditures are likely to increase by nearly $10 million owing to these latest buyouts.

Vail Resorts, chairman and chief executive officer, Rob Katz, stated that “We are thrilled that with this acquisition, skiers and riders living in and around some of the biggest cities in the country will now have access to both ski close to home and at renowned mountain resorts around the world – with just one pass.”

Notably, Vail Resorts’ focus on acquisitions and mergers to strengthen its portfolio of differentiated and varied services is commendable. On Aug 15, 2018, the company acquired Stevens Pass Resort in Washington from Ski Resort Holdings, LLC, for $64 million. Additionally, on Sep 27, 2018, Vail Resorts acquired Triple Peaks, LLC — the parent company of Okemo Mountain Resort in Vermont; Crested Butte Mountain Resort in Colorado and Mount Sunapee Resort in New Hampshire for a cash price of roughly $74 million.

Stock Performance

In the past six months, this Zacks Rank #3 (Hold) company has gained 10.9% against the industry’s 6.3% decline. This outperformance can be attributed to the company’s better-than-expected earnings in six of the trailing seven quarters. In the trailing four quarters, Vail Resorts delivered average positive earnings surprise of 3.6%.

An impressive season pass program, increased focus on acquisitions and mergers along with efficient marketing efforts bode well for Vail Resorts.



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