Viad Corp (VVI) Stock Takes Flight on $535 Million GES Sale, Setting Stage for Pursuit Growth
Shares of Viad Corp (VVI) soared over 17% in Monday’s trading session after the company announced a strategic move to sell its GES exhibition services and experiential marketing business to Truelink Capital for a hefty $535 million. This transaction marks a significant shift for Viad, allowing the company to concentrate on its rapidly expanding Pursuit attractions and hospitality segment.
The Deal’s Details:
The $535 million purchase price will be adjusted based on cash, debt, debt-like items, and normalized working capital. A portion of the payment, amounting to $25 million, will be deferred for one year after closing and is contingent on the passage of time.
A New Chapter for Viad and Pursuit:
The sale of GES effectively separates Viad’s global exhibition services from its burgeoning Pursuit segment. While both businesses will remain under Viad’s umbrella until the transaction is finalized, the move sets the stage for a smooth transition of GES to Truelink’s portfolio. Following the completion of the sale, Viad intends to rebrand as Pursuit and will adopt the new NYSE ticker symbol PRSU.
Pursuit’s Promising Trajectory:
Pursuit has been experiencing impressive growth, attracting 3.5 million visitors to its attractions and hosting guests for nearly 420,000 room nights in 2023. The segment generated $350 million in revenue, boasting an impressive Adjusted EBITDA margin of 26.4%. This robust performance underscores Pursuit’s potential as a standalone entity.
Strategic Financial Moves:
The transaction is slated to close by the end of 2024, subject to regulatory approvals and standard closing conditions. Upon completion, Viad plans to utilize the cash proceeds to retire its 2021 Credit Facility, which comprises a $317 million outstanding Term Loan B and a $170 million revolving credit facility.
Executive Insights:
Steve Moster, Viad’s President and Chief Executive Officer, expressed enthusiasm about the deal, 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.” He further emphasized the strategic implications of the sale, stating, “Through this transformative sale, we intend to establish Pursuit as a pure-play, high-growth, high-return business, with the financial strength and balance sheet to capitalize on its substantial growth prospects in the hospitality and attractions space. Additionally, the improved margin profile and growth trajectory of GES position it well for continued success under a new owner that is committed to maximizing GES’ growth potential.”