Peak Resorts to Buy Three Pennsylvania Mountains

Liberty Mountain, Roundtop Mountain and Whitetail Resort will join Peak Resorts before the end of the year, the companies announced this morning.  Privately-held Snow Time Inc. operates the three southern Pennsylvania properties, which generated approximately $11 million in EBITDA last year with more than 600,000 skier visits.  Peak Resorts (SKIS) is traded on the Nasdaq and currently runs 14 mountain resorts in Indiana, Missouri, New Hampshire, New York, Ohio, Pennsylvania and Vermont.  The $76 million cash and stock deal represents a multiple of approximately 6.8 times earnings and is expected to close prior to the beginning of the 2018-19 ski season.  Liberty, Roundtop and Whitetail operate a combined 18 lifts, almost all of them built by Doppelmayr and CTEC.

“The transformative acquisition of Snow Time offers a rare opportunity for Peak Resorts to dramatically grow our company by expanding the number of destinations for our Peak Pass holders in the Northeast while growing our presence in the very attractive and densely populated markets of Baltimore and Washington, D.C.,” said Timothy Boyd, President and Chief Executive Officer of Peak Resorts. “Over the course of more than 50 years, Irvin Naylor and his team have established three exceptionally well cared for mountain resorts across the southern tier of Pennsylvania and we are delighted to welcome these wonderful facilities and the Snow Time team to the Peak Resorts family. Furthermore, we expect the addition of these turn-key resorts to our portfolio ahead of the 2018/2019 ski season will result in immediate financial benefits for Peak Resorts.”  The new, larger Peak will total 17 mountains with 109 aerial lifts upon closing.

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4 thoughts on “Peak Resorts to Buy Three Pennsylvania Mountains

  1. Collin September 24, 2018 / 8:00 am

    This will certainly help them sell more passes in the Baltimore/DC market and get these people to ski at Hunter and Mount Snow when they want to go to a bigger mountain.

    I wonder how they’re going to pay for all of this given they have so much debt already.

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    • Peter Landsman September 24, 2018 / 8:37 am

      “Peak Resorts has obtained committed financing for the cash portion of the purchase price, consisting of: a $50 million, two-year senior secured term loan from CAP 1 LLC, which will accrue interest at an annual rate of 6.95% and $20 million in proceeds from the sale of 20,000 shares of Series A cumulative convertible preferred stock and issuance of accompanying warrants to CAP 1 LLC pursuant to an existing securities purchase agreement.”

      According to Bloomberg, Cap 1 is controlled by Richard Sackler, former Chairman and President of Purdue Pharma, and his son Jonathan.

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  2. Collin September 24, 2018 / 9:39 am

    They paid about over 25 million a year in capital improvements over the past two years, so instead they’ll be paying the loan to buy the PA mountains. If they use the option to extend the loan term, then they should be able to upgrade Sunbrook at Mount Snow.

    Like

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