SCOTTSDALE, Ariz. - Viad Corp (NYSE: NYSE:VVI), a provider of extraordinary experiences in hospitality and leisure, has entered into a definitive agreement to sell its GES business to Truelink Capital for $535 million. The transaction is expected to close by the end of 2024, pending regulatory approvals and customary closing conditions.
The sale involves GES, a global exhibition services and experiential marketing business, and is part of a strategic move to separate it from Viad’s Pursuit attractions and hospitality business. Until the transaction is finalized, both entities will continue operations under Viad, ensuring a smooth transition for GES to become a standalone entity within Truelink’s portfolio.
Post-sale, Viad plans to change its corporate identity to Pursuit and switch its NYSE ticker to PRSU. This rebranding reflects Viad's focus on its core business of delivering unforgettable experiences at iconic destinations. Pursuit operates a collection of attractions and hospitality services in the United States, Canada, and Iceland, including 14 attractions and 27 lodges.
In 2023, Pursuit welcomed 3.5 million visitors, with lodging guests occupying nearly 420,000 room nights, generating revenue of $350 million and an Adjusted EBITDA margin of 26.4%.
David Barry, President of Pursuit since 2015, will assume the roles of CEO and President following the transaction's closure. Steve Moster, the current President and CEO of Viad, will transition to an advisory role.
The proceeds from the GES sale will be used to retire Viad's 2021 Credit Facility, which includes a Term Loan B and a revolving credit facility, and to further Pursuit's growth through its Refresh, Build, Buy strategy. The $535 million purchase price for GES will be adjusted for cash, debt, and working capital and will be paid in cash, with $25 million deferred for one year post-closing.
Viad's decision to divest GES and focus exclusively on Pursuit is expected to align the company with investor preferences and market trends, providing a simplified business model and enhanced opportunities for growth and employee development.
This news is based on a press release statement from Viad Corp.
In other recent news, Viad Corp has been the focus of several notable developments. Viad Corp's Q2 2024 earnings surpassed expectations, despite challenges from wildfires in Jasper National Park. The company's Global Experience Specialists (GES) and Pursuit divisions demonstrated robust performance, contributing to the strong earnings with GES's revenue growth and margin improvement leading to adjusted EBITDA surpassing guidance.
In addition to financial performance, Viad Corp announced the appointment of Jill Bright to its Board of Directors. Bright, who will serve until the 2025 annual meeting of stockholders, was appointed under the terms of the Stockholders Agreement with Crestview Partners IV GP, L.P. and affiliated entities, who hold the company's 5.5% Series A Convertible Preferred Stock.
Furthermore, Oppenheimer has reaffirmed its Outperform rating on Viad Corp, reflecting confidence in the company's recovery and growth capacity. The firm noted Viad Corp's shares are trading at an attractive valuation, potentially presenting a favorable opportunity for investors.
Lastly, Viad Corp is committed to scaling its Pursuit division through organic and inorganic investments, allocating $20 million for build and refresh projects in 2024. This comes in light of Pursuit revising its full-year guidance for adjusted EBITDA due to wildfire-related uncertainty, yet maintaining an optimistic outlook for recovery and reopening of attractions.
InvestingPro Insights
As Viad Corp (NYSE: VVI) prepares to divest its GES business and rebrand as Pursuit, investors should consider some key financial metrics and insights from InvestingPro. The company's market capitalization stands at $757.26 million, reflecting its current valuation in the market.
Viad's recent financial performance shows promise, with revenue growth of 8.07% over the last twelve months and a notable 18.18% growth in the most recent quarter. This aligns with the company's strategic focus on its Pursuit attractions and hospitality business, which has been driving growth.
InvestingPro Tips highlight that Viad's net income is expected to grow this year, which could be a positive indicator for investors as the company transitions to focus solely on its Pursuit segment. Additionally, the company is trading at a low P/E ratio relative to its near-term earnings growth, suggesting potential undervaluation.
However, it's worth noting that Viad currently trades at a high Price / Book multiple of 18.38, which may indicate that the market has already priced in some of the expected benefits from the GES divestiture and rebranding.
For investors seeking more comprehensive analysis, InvestingPro offers additional tips and insights. Currently, there are 10 more InvestingPro Tips available for Viad Corp, providing a deeper understanding of the company's financial health and market position.
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