Viad Corp Announces Mandatory Conversion of Preferred Stock
Viad Corp (NYSE: VVI), based in Scottsdale, Arizona, has made an exciting announcement regarding its 5.5% Convertible Series A Preferred Stock. The company successfully achieved the right to convert all outstanding shares of this Preferred Stock as part of a process termed the Mandatory Conversion. This decision comes as a result of strong stock performance and aims to streamline Viad's capital structure.
Details of the Mandatory Conversion
The Mandatory Conversion is set to be effective as of December 31, 2024. As part of this process, Viad will convert approximately 135,000 shares of Preferred Stock into an estimated 6.7 million shares of common stock. This move eliminates the future obligation of $8 million in annual cash dividend payments that would have been required for the Preferred Stock.
The criteria for this conversion were met when Viad's common stock price exceeded a volume-weighted average of $42.50 for 20 out of a 30-day trading period. This milestone reflects the company's robust market performance, showcasing investor confidence in Viad's business strategies.
Leadership Comments on the Conversion
Steve Moster, the President and CEO of Viad, expressed enthusiasm about this significant milestone. He noted, "We are pleased to have reached this important milestone based on our strong stock-price performance. Converting the shares of preferred stock held by Crestview Partners enables us to simplify our capital structure". This statement emphasizes the implications of the conversion for the company’s financial health.
The Future of Viad and Pursuit
Linked to this conversion announcement is the anticipated launch of Pursuit as a standalone public company. This transition, resulting from the sale of Viad’s GES business, is expected to close on December 31, 2024. Pursuit operates as an attractions and hospitality company, offering an array of experiences in several iconic destinations, including various national parks and globally renowned travel locations.
Brian Cassidy, President and Head of Media at Crestview and a member of the Viad Board, remarked on the fruitful collaboration with the company, stating, "We are very proud of our relationship with the Company and are excited about Pursuit's opportunity for accelerated growth as a standalone entity". This reflects both excitement and confidence in Pursuit's potential following the transformation.
Pursuit's Growth Strategy
The establishment of Pursuit is expected to spark significant growth as it adopts an assertive Refresh, Build, Buy strategy aimed at expanding its footprint within the hospitality marketplace. This strategic framework will facilitate Pursuit in developing its operations and maximizing the value of its offerings across various consumer segments.
About Viad Corp
Viad (NYSE: VVI) stands out as a prominent global provider of extraordinary experiences through its dual-business model encompassing Pursuit and GES. The company is dedicated to creating memorable experiences that not only delight visitors but also drive sustainable growth and superior returns for shareholders. Viad's inclusion in the S&P SmallCap 600 highlights its significance in the market.
Pursuit, under the Viad umbrella, manages a diverse portfolio of attractions and lodgings, with a focus on crafting remarkable experiences that resonate with visitors. The company's amenities span across unforgettable attractions and additional services that connect guests to the beauty of nature and cultural heritage.
GES complements Viad’s offerings by delivering comprehensive exhibition services and experiential marketing solutions. With a reputation for excellence, GES partners with leading brands and event organizers globally to simplify the complexities associated with major exhibitions and trade shows.
Frequently Asked Questions
What is the Mandatory Conversion announced by Viad Corp?
The Mandatory Conversion refers to Viad's decision to convert all outstanding shares of its 5.5% Convertible Series A Preferred Stock into common stock starting December 31, 2024.
Why is Viad Corp converting its Preferred Stock?
The conversion simplifies Viad’s capital structure and eliminates cash dividend payments of $8 million per year, reflecting enhanced financial health.
What will happen to the Preferred Stock holders?
Preferred Stock holders will receive approximately 6.7 million shares of Viad common stock upon conversion.
What is Pursuit and how is it related to Viad?
Pursuit is an attractions and hospitality company that will operate independently after the sale of Viad’s GES business, enhancing its growth opportunities.
How does the conversion affect Viad's future?
By facilitating the conversion, Viad is positioning itself for future growth through its subsidiary Pursuit, allowing for strategic investments and expansion in the hospitality and attractions sector.
