Viad Corp's Strategic Sale of GES for $535 Million
Viad Corp (NYSE: VVI) has recently made headlines as its shares surge following the announcement of a significant deal to sell its GES business to Truelink Capital for an impressive $535 million. This move is a pivotal shift for the company, aimed at redefining its identity and operations within the attractions and hospitality sector.
Details of the GES Transaction
The sale price of $535 million will undergo adjustments based on cash, debt, debt-like items, and normalized working capital, with the full amount scheduled to be paid in cash.
Of this total, $25 million is marked for deferral for a year after the closing, contingent on the mere passage of time. This strategic decision sets the path for Viad to streamline its operations and focus on its core business.
Separation from GES Business
With this transaction, GES will separate from Viad’s Pursuit attractions and hospitality segment. Until the transaction receives final approval, GES and Pursuit will continue to function under the Viad umbrella, ensuring a smooth transition to Truelink’s portfolio.
Rebranding as Pursuit
Following the completion of the sale, Viad plans to rebrand as Pursuit. This rebranding comes with the exciting change of its NYSE ticker symbol to PRSU, reflecting its renewed focus on the attractions and hospitality market.
Performance Highlights of Pursuit
Notably, in the current year, Pursuit's attractions have drawn in 3.5 million visitors, highlighting its significant appeal and reach. Pursuit hosts nearly 420,000 room nights, contributing to a substantial revenue generation of $350 million, complemented by an impressive Adjusted EBITDA margin of 26.4%.
Financial Strategy Post-Transaction
The transaction is anticipated to finalize by the end of 2024, subject to regulatory approvals and customary closing conditions. Once completed, the cash proceeds will be directed toward retiring Viad’s 2021 Credit Facility, which includes a hefty $317 million outstanding Term Loan B, alongside a revolving credit facility amounting to $170 million, which remains untapped as of the last report.
Statements from Leadership
Steve Moster, Viad’s President and Chief Executive Officer, commented on the strategic move, stating, “Both Pursuit and GES have seen significant demand and achieved remarkable results. After a decade-long growth journey, Pursuit is now an industry leader with the assets, resources, and capabilities to stand on its own.”
Moster added that this transformative sale is aimed at establishing Pursuit as a pure-play, high-growth, and high-return business, poised to leverage its financial strength for growth opportunities in the hospitality and attractions space.
Market Response
As a reflection of the positive market sentiment following the announcement, shares of VVI rose by 17.2%, reaching $41.93. This uptick indicates investor confidence in Viad's strategic direction and potential for future growth.
Frequently Asked Questions
What is the amount Viad Corp is selling GES for?
Viad Corp is selling its GES business for $535 million.
What will happen to the GES business after the sale?
GES will transition to Truelink Capital, while Pursuit will continue under Viad until the deal is finalized.
What is Viad's new ticker symbol after rebranding?
After the sale, Viad plans to change its NYSE ticker symbol to PRSU as part of its rebranding to Pursuit.
How many visitors did Pursuit attract recently?
Pursuit attracted 3.5 million visitors to its attractions in the recent year.
When is the transaction expected to finalize?
The transaction is expected to close by the end of 2024, pending regulatory approvals.
