Experience Co: Skydiving Exit, Reef Pivot — What the $110 Million Deal Reveals

Experience Co, an Australian-listed adventure tourism company known for tandem skydiving and Great Barrier Reef tours, is transforming from the company investors know into something different. In July 2026, it agreed to sell its Australian and New Zealand skydiving and aviation businesses for $110 million. The deal closes an era for a business that grew through acquisition over 25 years and raises a concrete question: after stripping out half its revenue, what's left — and is it worth holding?

The short answer comes from the numbers that preceded the deal. Revenue from continuing operations fell from $134.3 million in FY25 to $129.6 million in FY26, while underlying EBITDA dropped from $19.3 million to $17.6 million. Skydiving — the largest segment, historically more than 50% of revenue — declined for the full year. EBITDA in the final quarter fell 31% to $2.0 million as fuel costs, wage inflation, weather disruptions, and promotional spending ate through margins. The sale isn't happening in spite of trouble; it's the direct response to it.

What Experience Co Does

The company operates three pillars of adventure tourism across Australia and New Zealand. Skydiving has been the crown jewel since the 2015 IPO, running tandem operations at iconic locations including the Great Ocean Road, Byron Bay, and Queenstown. Adventure Experiences covers Great Barrier Reef day tours, snorkeling, and scuba operations out of Cairns under the Reef Unlimited brand. Treetops Adventure operates aerial zipline and high-ropes parks in Sydney, Canberra, and other locations. The business is asset-heavy, relying on aircraft, marine vessels, and hard-to-replicate regulatory permits. The moat is real — aircraft licenses, marine park permits, and long-term leases at premium tourist sites create barriers to entry. But the business is also cyclical, weather-sensitive, and dependent on a continuous stream of new customers. Skydiving is, by nature, a one-time thrill.

The numbers show a business whose two halves are moving in opposite directions. In FY26, the Adventure Experiences segment grew revenue 6% to $65.8 million, driven by modest volume gains at Reef Unlimited (+3% passengers) and double-digit volume growth at Treetops (+10%). Meanwhile, skydiving revenue fell 2% to $63.8 million, with tandem passenger numbers declining from 119,000 to 117,000. Skydive Australia was the weak link — quarterly revenue and volume fell 15% and 12% in Q4 — though Skydive New Zealand managed 17% revenue growth and a 25% volume increase. The divergence between the two halves of the business set up the decision that followed.

The Deal Structure

Here is where the transaction becomes concrete. Experience Co agreed to sell the entire skydiving and aviation operation to New Zealand's Inflite Group. The enterprise value of the combined merged business sits at $110 million, but Experience Co's actual consideration is $65 million, broken into three pieces:

$41 million in upfront cash. $5 million in a vendor loan note, repayable after five years. A 32.5% minority stake in the merged entity, valued at $19 million.

Inflite retains 67.5% ownership of the combined skydiving business. The deal is structured as a non-binding term sheet and remains subject to due diligence, financing, shareholder approval, and regulatory clearance. There is no certainty of completion.

Experience Co keeps its reef operations, its Treetops Adventure parks, and its North Queensland rainforest experiences. After the deal closes, what was once a diversified adventure group becomes a focused reef and land-based experience company — with a minority ownership slice of the skydiving business it used to run.

What $41 Million Means Relative to the Company

The upfront cash changes the balance sheet in a meaningful way. At the time of the FY26 results, Experience Co reported net debt of roughly $27 million (after Wild Bush Luxury was divested in May 2026 and before the skydive proceeds). A $41 million cash injection would eliminate that debt and leave surplus cash to reinvest in the remaining operations — including a $4 million Queensland Government Tourism Icons grant for a new reef vessel, Reef Magic IV, expected to enter service in December 2027.

But the market cap provides context. Experience Co trades at approximately $69 million, with an enterprise value around $97 million. The $41 million in upfront cash represents roughly 59% of the current market cap. That means the market is effectively assigning a value of $28 million to the reef and Treetops businesses before accounting for the minority stake in the skydiving merge. Put differently, the retained operations — which generated $65.8 million in revenue last year with a share of the $17.6 million group EBITDA — are being priced for roughly the size of a single business unit in the company's old structure.

Valuation and the New Shape

The old Experience Co traded at roughly 4.5 times its market cap to FY26 revenue. The new one, post-sale, would operate on a much smaller revenue base — closer to $65 million — but the question isn't the revenue scale. It's the margin trajectory and cash flow durability of the retained assets.

The reef business benefits from structural barriers. Marine park permits are limited and highly regulated, making new entry expensive. The asset base of modern vessels supports higher average revenue per customer, and the customer base is broader than skydiving's one-time thrill seekers — families, couples, and international tourists create more repeat and seasonal demand. Treetops Adventure showed volume growth of 10% in FY26, though average revenue per customer declined 3%, suggesting the growth came from lower-yield visitors at the new Canberra location.

The margin picture is more delicate. Underlying EBITDA across the full group was $17.6 million on $129.6 million in revenue, a margin of roughly 13.6%. The skydiving segment, which is being sold, was a drag on that number in FY26. The retained operations likely carry a higher margin share relative to their revenue contribution — but the company's Q4 EBITDA collapse to $2.0 million, with fuel costs rising from 4% to 6.5% of group revenue, shows how quickly operating leverage can reverse when headwinds hit. A smaller company with fewer revenue streams means less diversification against weather, fuel price spikes, and tourism cycles.

The Risks That Remain

Transaction execution risk is the most immediate one. The deal is a non-binding term sheet. Due diligence, shareholder approval, financing, and regulatory clearance must all clear. If it falls apart, the company returns to the same position: declining skydiving volumes, compressed margins, and an asset portfolio that was being reviewed because management admitted it was "not happy" with Skydive Australia's performance.

Concentration risk is the second. After the sale, reef tours and Treetops Adventure become the entire business. That's two segments, both weather-exposed, both dependent on visitor flows, and both operating in niche tourism categories. The skydiving business was at least geographically diversified across Australia and New Zealand. The retained portfolio is heavily Cairns and Sydney-centric.

The minority stake in the merged skydiving entity creates an unusual situation. Experience Co will own 32.5% of a private aviation tourism company in which it has no control. That stake is valued at $19 million on paper — but it's illiquid, private, and its value depends on the operational performance of a business whose management and strategy will now be set by Inflite.

The One Thing Working

Treetops Adventure is the only segment showing volume growth that isn't explained by post-pandemic recovery. Volumes rose 10% in FY26, and the company added West Beach Adventure to the portfolio in July. This is the growth engine that isn't being sold — and it's the reason the retained business isn't just a reef company shrinking toward irrelevance. But the segment is small, the margin quality needs watching, and the new Canberra location's lower average revenue per customer suggests the growth may come at the cost of yield.

Where This Leaves the Stock

The deal, if it closes, is rational. Management is exiting a declining, operationally difficult business that required a "root-and-branch" review and was losing volume and margin. The upfront cash clears the balance sheet and creates capital for the retained businesses. The retained reef and adventure operations carry real competitive barriers and a modest growth story.

But the arithmetic of the deal means the stock's value now hinges on two smaller businesses rather than one large failing one and one moderate growing one. The $28 million the market appears to assign to the retained operations — before the minority stake — is not an enormous number, but it's not a deep discount either. The retained revenue base is $65 million; the EBITDA contribution is unknown without segment-level disclosure, but group-wide margins were already under pressure. The company would need the margin profile of the retained operations to improve materially — through the Reef Magic IV vessel, the Treetops pipeline, and cost discipline — to justify the current price and reward the patience the deal requires.

The catalyst clock is clear. The deal needs shareholder approval and regulatory clearance; if it stalls, the stock reverts to its pre-deal valuation on a deteriorating operating picture. If it closes, the new company reports its first results as a reef-and-adventure business in the next fiscal year. Between now and then, the $41 million in cash sits on the balance sheet, and the question of whether the retained businesses can produce a margin profile that supports the remaining valuation remains the one metric that carries the case.