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Vail Resorts (MTN) to Acquire New Resorts in Pennsylvania
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Vail Resorts, Inc. (MTN - Free Report) recently entered into a definitive agreement with Seven Springs Mountain Resort, Inc. to acquire Seven Springs Mountain Resort and its sister resorts — Hidden Valley and Laurel Mountain. Quoted at approximately $125 million, the deal includes the acquisition of all assets related to the mountain operations of the resorts, related base area lodging, conference center and amenities. The company expects to close the deal in winter 2021.
Kirsten Lynch, chief executive officer of Vail Resorts, stated, "As a company, we have been focused on acquiring resorts near major metropolitan areas as we know many skiers and riders build their passion for the sport close to home.”
Located in the southeast of the Pittsburgh area (Pennsylvania), Seven Springs Mountain Resort comprises 285 acres and 750 vertical feet for skiing and snowboarding. It also offers resort amenities, including a 418-room hotel, conference center, a full-service spa and tubing. Hidden Valley offers 110 skiable acres and 470 vertical feet, with 26 slopes and trails and two terrain parks. Laurel Mountain offers 70 skiable acres and 761 vertical feet.
The company anticipates this acquisition to pave the path for a stronger connection through attractive offerings to prospective guests in Pittsburgh. Vail Resorts stated that it intends to add access to the three resorts to select Epic Pass products for the 2022-23 North American ski and ride season.
Buyout Synergies
The company anticipates the acquisition to generate incremental annual EBITDA in excess of $15 million for the fiscal year ended Jul 31, 2023. This includes incremental annual EBITDA of approximately $5 million associated with the 418-room Slopeside Hotel and associated conference facilities and lodging operations at Seven Springs Mountain Resort. Capital expenditures are expected to increase approximately $3 million to support the addition of these resorts, subject to the closing of the transaction.
Price performance
Image Source: Zacks Investment Research
So far this year, shares of Vail Resorts have gained 23.7% compared with the industry’s 4.8% growth. The company is benefiting from its offerings such as Epic Pass, Epic Local Pass, Epic Day Pass and Epic Coverage products. This, along with a focus on digital marketing and media advertising, bodes well. The company expects it to be a key growth driver as it relates to the growing number of people associated with the program. Vail Resorts continues to reinvest in its resorts to boost customer traffic. However, coronavirus-related woes persist. Although the company is witnessing sequential improvements in visitation, it is still behind the pre-pandemic levels. This, along with competition and weather-related woes, is a concern. Earnings estimates for 2022 have remained unchanged in the past 30 days, limiting the upside potential of the stock.
Some better-ranked stocks in the Consumer Discretionary sector include Hilton Grand Vacations Inc. (HGV - Free Report) , Bluegreen Vacations Holding Corporation and Camping World Holdings, Inc. (CWH - Free Report) .
Hilton Grand Vacations sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 411.1%, on average. Shares of the company have increased 64.4% so far this year.
The Zacks Consensus Estimate for Hilton Grand Vacations’ current financial-year sales and earnings per share (EPS) suggests growth of 222.1% and 152.3%, respectively, from the year-ago period’s levels.
Bluegreen Vacations flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 695%, on average. Shares of the company have surged 143.9% so far this year.
The Zacks Consensus Estimate for Bluegreen Vacations’ current financial-year sales and EPS indicates a rise of 27.5% and 199.3%, respectively, from the year-ago period’s levels.
Camping World carries a Zacks Rank #2 (Buy). The company benefits from the launch of a fresh peer-to-peer RV rental marketplace and a mobile service marketplace. It has been investing heavily in product development.
Camping World has a trailing four-quarter earnings surprise of 70.9%, on average. Shares of the company have appreciated 56.8% so far this year. The Zacks Consensus Estimate for CWH’s financial-year sales and EPS suggests growth of 25.9% and 77.6%, respectively, from the year-ago period’s levels.
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Vail Resorts (MTN) to Acquire New Resorts in Pennsylvania
Vail Resorts, Inc. (MTN - Free Report) recently entered into a definitive agreement with Seven Springs Mountain Resort, Inc. to acquire Seven Springs Mountain Resort and its sister resorts — Hidden Valley and Laurel Mountain. Quoted at approximately $125 million, the deal includes the acquisition of all assets related to the mountain operations of the resorts, related base area lodging, conference center and amenities. The company expects to close the deal in winter 2021.
Kirsten Lynch, chief executive officer of Vail Resorts, stated, "As a company, we have been focused on acquiring resorts near major metropolitan areas as we know many skiers and riders build their passion for the sport close to home.”
Located in the southeast of the Pittsburgh area (Pennsylvania), Seven Springs Mountain Resort comprises 285 acres and 750 vertical feet for skiing and snowboarding. It also offers resort amenities, including a 418-room hotel, conference center, a full-service spa and tubing. Hidden Valley offers 110 skiable acres and 470 vertical feet, with 26 slopes and trails and two terrain parks. Laurel Mountain offers 70 skiable acres and 761 vertical feet.
The company anticipates this acquisition to pave the path for a stronger connection through attractive offerings to prospective guests in Pittsburgh. Vail Resorts stated that it intends to add access to the three resorts to select Epic Pass products for the 2022-23 North American ski and ride season.
Buyout Synergies
The company anticipates the acquisition to generate incremental annual EBITDA in excess of $15 million for the fiscal year ended Jul 31, 2023. This includes incremental annual EBITDA of approximately $5 million associated with the 418-room Slopeside Hotel and associated conference facilities and lodging operations at Seven Springs Mountain Resort. Capital expenditures are expected to increase approximately $3 million to support the addition of these resorts, subject to the closing of the transaction.
Price performance
So far this year, shares of Vail Resorts have gained 23.7% compared with the industry’s 4.8% growth. The company is benefiting from its offerings such as Epic Pass, Epic Local Pass, Epic Day Pass and Epic Coverage products. This, along with a focus on digital marketing and media advertising, bodes well. The company expects it to be a key growth driver as it relates to the growing number of people associated with the program. Vail Resorts continues to reinvest in its resorts to boost customer traffic. However, coronavirus-related woes persist. Although the company is witnessing sequential improvements in visitation, it is still behind the pre-pandemic levels. This, along with competition and weather-related woes, is a concern. Earnings estimates for 2022 have remained unchanged in the past 30 days, limiting the upside potential of the stock.
Zacks Rank and Stocks to Consider
Currently, Vail Resorts carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Some better-ranked stocks in the Consumer Discretionary sector include Hilton Grand Vacations Inc. (HGV - Free Report) , Bluegreen Vacations Holding Corporation and Camping World Holdings, Inc. (CWH - Free Report) .
Hilton Grand Vacations sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 411.1%, on average. Shares of the company have increased 64.4% so far this year.
The Zacks Consensus Estimate for Hilton Grand Vacations’ current financial-year sales and earnings per share (EPS) suggests growth of 222.1% and 152.3%, respectively, from the year-ago period’s levels.
Bluegreen Vacations flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 695%, on average. Shares of the company have surged 143.9% so far this year.
The Zacks Consensus Estimate for Bluegreen Vacations’ current financial-year sales and EPS indicates a rise of 27.5% and 199.3%, respectively, from the year-ago period’s levels.
Camping World carries a Zacks Rank #2 (Buy). The company benefits from the launch of a fresh peer-to-peer RV rental marketplace and a mobile service marketplace. It has been investing heavily in product development.
Camping World has a trailing four-quarter earnings surprise of 70.9%, on average. Shares of the company have appreciated 56.8% so far this year. The Zacks Consensus Estimate for CWH’s financial-year sales and EPS suggests growth of 25.9% and 77.6%, respectively, from the year-ago period’s levels.