Vail carves up competition, buys Perisher

Vail carves up competition, buys Perisher
By Daisy Melwani


Vail Resorts will acquire NSW’s Perisher Ski Resort, its first international mountain resort and the largest in the Southern Hemisphere for A$176.6 million.

The deal, which broke this morning, is subject to certain adjustments including approval by the NSW government, and is expected to close in the fourth quarter of FY15. Vail intends to fund the purchase price with cash on hand.

With this acquisition, Vail will become the only mountain company to operate ski resorts on two continents.

Perisher remains the most visited ski resort in Australia and holds a long-term lease with the NSW government expiring in 2048 with a 20-year renewal option.

The acquisition includes the resort areas known as Perisher Valley, Smiggin Holes, Blue Cow and Guthega, along with ski school, lodging, food and beverage, retail/rental and transportation operations.

“This acquisition is part of Vail Resorts’ continued strategy to drive season pass sales and build loyalty with guests from around the world. Australia is one of the most important international markets for ski resorts across the Northern Hemisphere, generating an estimated over 1 million skier visits annually to resorts in North America, Japan and Europe,” Vail Resorts, chief executive officer, Rob Katz said.

“We see this as a ground-breaking acquisition that will dramatically enhance the connection between our Company and Australian skiers and riders. We also see the acquisition as a natural fit, as Perisher is the Australian leader in innovation and guest experience – both hallmarks of Vail Resorts.”

To coincide with the announcement, Perisher is re-opening season pass sales for the upcoming ski season which commences on June 6 2015. Vail Resorts are offering snow enthusiasts who have purchased or will buy Perisher Freedom passes free Epic Benefits, which entitles them access to 9 resorts in the US including Vail and Park City. The company will then extend the Epic Pass to include Perisher access for the 2015-16 ski season.

“To immediately showcase the power of this new connection, Vail Resorts is offering Perisher season pass holders an unprecedented opportunity by combining unlimited skiing, from June through October, at the best and largest resort in Australia with season-long skiing, from November through April, at nine of the best mountain resorts in the United States” Katz said.

Vail expects the acquisition to generate an incremental EBITDA of A$20 million during its first 12 months from the close of sale and US$6 million of free cash flow in its first year of operations minus expenditures and taxes. It then expects the resort to generate positive EBITDA of A$38 million during the ski season and a negative A$18 million during off-season months of October through to May.

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