8-K: Viad Corp to Acquire Jasper SkyTram, Expanding Pursuit's Attractions Portfolio

Viad Corp has announced an agreement to acquire the Jasper SkyTram in Jasper National Park for $25 million Canadian dollars, expanding its Pursuit collection of attractions.

Summary

• Viad Corp has agreed to acquire the Jasper SkyTram attraction in Jasper National Park for $25 million Canadian dollars, which is approximately $18 million U.S. dollars.
• The transaction is expected to close in July, subject to customary closing conditions and approvals by Parks Canada.
• The Jasper SkyTram, which celebrated 60 years of operation, is a popular attraction that welcomed over 130,000 guests in 2023.
• The acquisition includes a renewable long-term lease with Parks Canada, with nearly 30 years remaining.
• Viad expects the Jasper SkyTram to add approximately $4 million in revenue during 2024, with an adjusted EBITDA margin that is accretive to Pursuits overall margin.
• The purchase price represents an adjusted EBITDA buy-in multiple of approximately 7x.

Sentiment

Score: 8

Explanation: The document conveys a positive sentiment due to the strategic acquisition, expected revenue growth, and accretive EBITDA margin. The company is expanding its portfolio with a well-established attraction.

Positives

• The acquisition of the Jasper SkyTram is a strategic fit for Viad's Pursuit collection, enhancing its presence in the Canadian Rockies.
• The SkyTram has a strong competitive position as the only sightseeing aerial ropeway in Jasper National Park.
• The attraction has a long-term lease with Parks Canada, providing stability.
• The acquisition is expected to be accretive to Pursuits overall EBITDA margin.
• The SkyTram has a strong team in place, led by GM Todd Noble.

Risks

• The transaction is subject to customary closing conditions and approvals by Parks Canada, which could delay or prevent the acquisition.
• The company is exposed to general economic uncertainty in key global markets and a worsening of global economic conditions.
• The company is exposed to travel industry disruptions.
• The company is exposed to the impact of its overall level of indebtedness, as well as its financial covenants, on its operational and financial flexibility.
• The company is exposed to the seasonality of its businesses.
• The company is exposed to unanticipated delays and cost overruns of its capital projects.
• The company is exposed to the competitive nature of the industries in which it operates.
• The company is exposed to adverse effects of show rotation on its periodic results and operating margins.
• The company is exposed to transportation disruptions and increases in transportation costs.
• The company is exposed to natural disasters, weather conditions, accidents, and other catastrophic events.
• The company is exposed to labor cost increases and work stoppages related to unionized employees.
• The company is exposed to multi-employer pension plan funding obligations.
• The company is exposed to cybersecurity attacks and threats.
• The company is exposed to currency exchange rate fluctuations.
• The company is exposed to liabilities relating to prior and discontinued operations.
• The company is exposed to the sufficiency and cost of insurance coverage.
• The company is exposed to compliance with laws governing the storage, collection, handling, and transfer of personal data and its exposure to legal claims and fines for data breaches or improper handling of such data.

Future Outlook

Viad expects the Jasper SkyTram to add approximately $4 million in revenue during 2024 and be accretive to Pursuits overall EBITDA margin. The company also plans for the future refresh and renewal of the SkyTram in alignment with Parks Canada and the Jasper community.

Management Comments

• Steve Moster, President and Chief Executive Officer of Viad, said, 'We are excited to continue the growth of Pursuit with the addition of the Jasper SkyTram. This attraction is a perfect strategic fit in Pursuits Banff Jasper Collection and the only sightseeing aerial ropeway in Jasper National Park.'
• David Barry, President of Pursuit, added, 'Pursuit has a long-standing history delivering exceptional guest experiences throughout the Canadian Rockies, and the Jasper SkyTram will be a great addition to our attractions and hospitality properties in Jasper and Banff.'

Industry Context

This acquisition aligns with the trend of companies expanding their portfolios of unique and experiential attractions in popular tourist destinations. Viad's focus on 'extraordinary experiences' is consistent with the growing demand for memorable travel and leisure activities.

Comparison to Industry Standards

• The acquisition multiple of 7x adjusted EBITDA is within the typical range for acquisitions in the attractions and leisure industry, although specific comparables would depend on the nature of the asset and its growth prospects.
• Comparable companies in the attractions space include Vail Resorts (MTN) and SeaWorld Entertainment (SEAS), which have similar business models focused on operating and managing attractions and resorts.
• The Jasper SkyTram's 130,000 visitors in 2023 is a solid figure for a regional attraction, but it is smaller than the visitor numbers of major theme parks or global attractions.

Stakeholder Impact

• Shareholders are likely to view the acquisition positively due to the expected revenue growth and accretive EBITDA margin.
• Employees of the Jasper SkyTram will become part of the Pursuit team.
• Customers will continue to enjoy the Jasper SkyTram experience, with potential future enhancements.
• Parks Canada will continue to be a key partner through the long-term lease agreement.

Next Steps

• The transaction is expected to close in July 2024, subject to customary closing conditions and approvals by Parks Canada.
• Viad plans for the future refresh and renewal of the SkyTram in alignment with Parks Canada and the Jasper community.

Key Dates

Keywords

acquisition, Jasper SkyTram, Viad Corp, Pursuit, attractions, Canadian Rockies, EBITDA, tourism, hospitality, Parks Canada