Peak Resorts to Acquire Hunter Mountain $35M+

WILDWOOD, Mo., Nov. 30, 2015 (GLOBE NEWSWIRE) -- Peak Resorts, Inc. (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.

http://finance.yahoo.com/news/peak-resorts-acquire-hunter-mountain-210000478.html

Not surprised that the Slutzsky's sold.

Peaks also owns Mt Snow, Wildcat, Attitash, Crotched, and Jack Frost/Big Boulder in the east. There were some rumors that Peaks might have been involved with Sadddleback. Hunter is a way better choice than Saddleback for making money. I hope they continue to run the snowmaking like the Slutzky's have run the snowmaking.

http://www.peakresorts.com/our-resorts/

I don't know why, but I'm sad to hear this..
I remember both brothers, I guess things change..

I'm sure Peak Resorts will do great with snowmaking, just like the original owners did.  Look at what they've done with Mount Snow and Big Boulder.  Also, I read in an article regarding the sale that they plan on having passes from their other resorts be valid at Hunter, and vice versa, which will be a great thing.

They appear to be the kings of the middle to lower tier resorts.  They have a little pods in the Midwest and NH.  This would make me think they will be looking to buy more in the Catskills or maybe Berkshires where they can be the big fish in a smaller pond.

The oddest thing is a ski company based in Missouri

They seem to be taking control of operations immediately, although the transaction won't be completed until the 3rd quarter of their 2016 fiscal year.  I wasn't surprised that Hunter got sold off.  Both the original founders have long since passed on and the family is likely not as committed to it as they used to be.  The did have a 50+ year run and decided that it was time to sell it off and move on.  It did generate 27 million in revenue each year, so the Slutzsky's are rich forever.  I never knew the owners personally, and I guess it sad to lose what was one of the few family run ski areas of its size, but if Peak Resorts runs it anything like how they've handled Mount Snow, they'll be a more than worthy successor.  Considering that Hunter would be one of their largest resorts, I think we'll get the improvement funds pretty quick.
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I wouldn't be jumping up and down. Hunter seems to throw off a nice profit and they don't need a lot of capital improvements. I wouldn't be surprised if they don't siphon off some of that for other resorts.

I expect them to cut costs and raise prices. They will still do a good job with snowmaking and grooming but not to the extent of the Slutzeky's ..

Next season we will know the extent of the changes if any...should be interesting

The numbers are a bit astonishing IMO. 300k skiers visit per year (I was sure it was more) and a 22% profit margin.  You knew Hunter was profitable but wow. And Peak wants to raise that margin, gulp.

to raise that margin, ya gotta raise revenue (price increase) and lower cost...

I have been skiing there for 37 yrs.. They are lot of older employees that I see year after year. I'm afraid they will be let go...

I also agree this move will not benefit the skiers, like me, who honestly enjoy Hunta--on weekdays.  

Positives, they may spruce up the place a bit--new owners tend to do this.   2) pass holders get more areas.
Negatives, not many, beside day rates going up for single day skiers, like me.      

I thought they were in the 350-400 k skier day range.
Only way a that hill made it was a lifetime of blood,sweat,and tears by two old school road building son of a guns.

As a passholder, I'm all for the sale.  I'd love having a pass at Hunter that was good at Mount Snow.  They don't really need any lift upgrades, and their snowmaking seems fine, but I could see them getting more automatic snowguns.  Maybe relocate the old ones to the west side.  Hopefully Peak Resorts will make some snow on Annapurna and Westway.

Since I have a drivers license and car, I may be skiing more days there rather than Mountain Creek.

Harvey wrote

The numbers are a bit astonishing IMO. 300k skiers visit per year (I was sure it was more) and a 22% profit margin.  You knew Hunter was profitable but wow. And Peak wants to raise that margin, gulp.

I agree, those numbers jumped out at me.  Are you sure about the 300K skier visits?  Here's what struck me:
$27 mil revenue, 300K skier visits = $90 per skier visit

For Gore or Whiteface, the numbers roughly shake out like this:
$10 mil revenue, 200K skier visits = $50 per skier visit

How is it that Hunter is generating so much more revenue per skier visit?  I know they have some lodging (not sure of the specifics), but is that lodging really throwing off $12 mil per year?  Plus Hunter's lift tix are less expensive than Gore / WF, so where's all that additional revenue coming from?  Those numbers make Hunter look like a freaking gold mine.

Not really sure about any of it, just what I got from the investor call. Insiders I spoke to said it actually comes down to more like $100 per visit. (!)  I think your $50 is reasonably close to the EC average, or maybe a little low. Been a while since I looked at it. (K vs Gore).  Difference could be % of day tickets?

Peak wants to take it to a 27% margin. This is a lot of subtext to this.

One thing I agree with is that the kids must have really wanted out.

Hunter built a one of those a 4 story hotel/condo thingies a few years ago. The one that has the all year round outdoor pool etc.
The hotel is always packed..

On a busy weekend they can see 10k skiers per day. They also have a huge learning center, that attracts a ton of NYC skiers..It is quite the operation...

I'm there almost every weekend,their food service and bar are hopping..I would give my left nut to own that bar..

I always brown bag my lunch and have a discount lift card..

With ya, JWx. I was thinking same thing---more bar/food $ spent, probably noticeably more single day lessons and rentals as well. All that adds up.

The summer stuff with mountain jam, the premier zip-line attraction in the NE...keeps things a bit more 4 seasons as well. I see this as a win for Snoloco and a loss for Jason. Sorry, Jason.

I forgot about the mountain jam..That is huge, it's all A list country stars. It attracts thousands...

I will reserve judgement on the sale for another 2 seasons. I doubt we will see  anything major this season. Hey things change, that's life.

Adk Jeff wrote

Harvey wrote

The numbers are a bit astonishing IMO. 300k skiers visit per year (I was sure it was more) and a 22% profit margin.  You knew Hunter was profitable but wow. And Peak wants to raise that margin, gulp.

I agree, those numbers jumped out at me.  Are you sure about the 300K skier visits?  Here's what struck me:
$27 mil revenue, 300K skier visits = $90 per skier visit

For Gore or Whiteface, the numbers roughly shake out like this:
$10 mil revenue, 200K skier visits = $50 per skier visit

How is it that Hunter is generating so much more revenue per skier visit?  I know they have some lodging (not sure of the specifics), but is that lodging really throwing off $12 mil per year?  Plus Hunter's lift tix are less expensive than Gore / WF, so where's all that additional revenue coming from?  Those numbers make Hunter look like a freaking gold mine.

The Doughy Joeys drink a lot more? The sushi bar?

When I lived out east I never considered skiing at Hunter once there was natural snow on the ground somewhere within driving distance, it was always just the place to go early season since they would open with the most terrain. Plattekill was always more my style. I didn't realize how successful of a ski operation it actually is, that's kind of bad ass that a family owned mid sized hill in the Cats could do so well.

yeah, and it looks like we found out what the street value of the mountain finally is, too.