Peak Resorts has entered into an agreement to purchase Hunter Mountain, located in the Catskill Mountains of New York, 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 in annual revenue. The purchase price is slightly more than six times Hunter Mountain’s adjusted EBITDA, which is estimated at approximately $6 million for its fiscal year ended April 30, 2015.
Peak Resorts currently has preliminary lender commitments for a first mortgage of approximately $20 million, which would be secured by Hunter Mountain assets. An existing line of credit is expected to fund the rest of the cash requirement. Peak Resorts expects to complete the purchase of Hunter Mountain by year-end 2015.
Hunter Mountain’s reputation as one of the premier snowmaking resorts in the East makes it a perfect fit for our portfolio and strategy,” said Timothy D. Boyd, Peak Resorts president and chief executive officer. “Our roadmap for growth calls for a mix of organic growth and resort development, as well as acquisitions that will let us build our portfolio of ski resorts in the attractive overnight and day-drive segments of the market,” Boyd noted.
Boyd added that Peak Resorts plans to offer reciprocal programs among its resorts for Hunter Mountain season pass holders as well as season pass holders at its current properties. Details have yet to be released, but he said information will be available by phone, in person, and on individual resorts’ websites in the coming weeks. The combination of Hunter Mountain, Jack Frost/Big Boulder, and Mount Snow will create a new multi-property season pass option for those in the New York City market.