Vail Resorts, the world's largest ski resorts operator, have confirmed that they're buying Crans-Montana ski area in Switzerland, the company's second Swiss resort.
Crans Montana is one of Switzerland's larger ski areas and future host of the FIS Alpine World Ski Championships in 2027. It's located two and a half hours away from Vail's other owned and operated European resort in Andermatt-Sedrun.
Vail Resorts is acquiring an 84-percent ownership stake in Remontées Mécaniques Crans Montana Aminona (CMA) SA, which controls and operates all the resort's lifts and supporting mountain operations, including 4 retail and rental locations. The company is acquiring an 80-percent ownership stake in SportLife AG, which operates one of the ski schools located at the resort. Vail Resorts is also acquiring 100 percent ownership of 11 restaurants located on and around the mountain.
"Crans-Montana is an iconic ski destination in the heart of the Swiss Alps, with a unique heritage, incredible terrain, passionate team, and a community dedicated to the success of the region," said Kirsten Lynch, Chief Executive Officer of Vail Resorts. "Our acquisition of the resort aligns to our growth strategy of expanding our resort network in Europe, creating even more value for our Pass Holders and guests around the world. Much like Andermatt-Sedrun, we believe Crans-Montana has a unique opportunity for future growth."
Vail Resorts plans to include access to Crans-Montana Mountain Resort on select Epic Pass products for the 2024-25 ski and ride season although the resort will not be included on the Epic Pass for any remaining part of the 2023-24 ski and ride season after the deal closes.
The Epic Pass currently provides access to Andermatt-Sedrun-Disentis, as well as European partner resorts, including five days at Verbier4Vallées in Switzerland, seven days at Les 3 Vallées in France, seven days at Skirama Dolomiti in Italy and three days at Ski Arlberg in Austria.
In a media statement, Vail gave the following financial details of the purchase:
Subject to closing adjustments, the valuation for the resort operations is expected to be CHF 118.5 million, including approximately CHF 7 million of debt that will remain in place. Vail Resorts anticipates that the resort will generate approximately CHF 5 million of EBITDA in its fiscal year ending July 31, 2025, the first full year of operations following the expected closing later in fiscal 2024.
Vail Resorts anticipates EBITDA growth over time from the inclusion of the resort on the Epic Pass products, network synergy, and investments in the guest experience. Subject to the timing of capital project approvals and completion, Vail Resorts is planning to invest approximately CHF 30 million over the next five years in one-time capital spending to elevate the guest experience, and the resort is expected to generate over CHF 15 million of annual EBITDA following these investments and including the impact from incremental Epic Pass sales. This initial phase of growth of the resort is expected to be primarily driven by operating and marketing initiatives along with capital investments focused on maximizing gastronomy efficiencies and improving and expanding snowmaking capabilities. After closing the transaction, normal annual maintenance capital expenditures for Crans-Montana Mountain Resort are expected to be approximately CHF 3 million.
The transaction is expected to close during the 2023-24 ski and ride season, subject to certain third-party consents. Operations at Crans-Montana Mountain Resort for the 2023-24 winter season will continue in the ordinary course of business. Vail Resorts is committed to retaining the vast majority of employees, the existing operational infrastructure, and local expertise. Vail Resorts will incorporate areas of expertise from its business strategy, including enhancements to data and analytics capabilities, accessibility with the Epic Pass product line up, and best practice sharing from its mountain operations.
Vail Resorts own about 40 resorts worldwide, the majority in the USA but also three leading Australian resorts as well as North America's biggest ski area of Whistler Blackcomb in Canada and its Swiss resorts.