Vail Buys Australia’s LARGEST Ski Resort for $136 Million

Vail just announced that they’ve agreed to purchase Australia’s largest ski resort:  Perisher Ski Resort.  They bought it for $136 million USD.  Vail just bought Park City Mountain Resort, UT for $182.2 million USD last year.

Vail will now own the largest ski resort in the USA and in Australia.  Perisher will be added to Vail’s “Epic Pass” making it even more…  epic.

Perisher is not only Australia’s largest ski resort, it’s also Australia’s most visited.  Perisher = 3,000 skiable acres, 47 lifts, 7 peaks.  This marks Vail’s first ever ski resort acquisition outside of the USA.

Vail sells over 400,000 season passes annually.

“The acquisition of our first international mountain resort is a significant milestone for our Company.  This acquisition is part of Vail Resorts’ continued strategy to drive season pass sales and build loyalty with guests from around the world.” – Rob Katz, Chairman and CEO

Vail is getting crazy with ski resort acquisitions right now.  Just last week, Vail announced that they’ll be creating the largest ski resort in the USA when they connect Park City Mountain Resort and They Canyons Resort in Utah to make a 7,300+ acre ski resort.

Who will Vail buy next?  Squaw Valley, USA?

Right now, Vail owns 12 ski resorts in the USA and Australia:

VAIL RESORTS’ SKI RESORTS:

Vail, CO

Beaver Creek, CO

Breckenridge, CO

Keystone, CO

Kirkwood, CA

Northstar, CA

Heavenly, CA

Park City, UT

The Canyons, UT

Mount Brighton, MI

Afton Alps, MN

Perisher, Australia

 VAIL PRESS RELEASE:

BROOMFIELD, Colo., March 30, 2015 /PRNewswire/ — Vail Resorts, Inc. (NYSE: MTN) today announced that the Company has agreed to acquire its first international mountain resort, Perisher Ski Resort (“Perisher”) in New South Wales, Australia, for total cash consideration of AU$176.6 million (approximately US$136 million), subject to certain adjustments. Perisher is the largest and most visited ski resort in Australia, and is well-positioned with access to the country’s largest cities, including Sydney, Melbourne, Adelaide,Canberra and Brisbane. Perisher is also the largest ski resort in the Southern Hemisphere. The acquisition is expected to close in the fourth quarter of fiscal 2015 following the satisfaction of certain conditions, including approval by the New South Wales Government under the long-term lease and license noted below.

The Company is purchasing 100 percent of the stock in the entities that operate Perisher from Murray Publishers Pty Ltd and Transfield Corporate Pty Ltd in Sydney. Perisher holds a long-term lease and license with the New South Wales Government under the National Parks and Wildlife Act, which expires 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, which together comprise Perisher.

“The acquisition of our first international mountain resort is a significant milestone for our Company. We’re thrilled to welcome the guests and employees of Perisher, Australia’s largest and most iconic resort, into the Vail Resorts family and deepen ties with one of our most important international markets,” said Rob Katz, chairman and chief executive officer of Vail Resorts. “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 more than 1 million skier visits annually to resorts in North America, Japan and Europe. 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.”

Vail Resorts also announced that as of today, Perisher has re-opened season pass sales for its upcoming ski season, which is set to open on June 6, 2015. Perisher’s popular “Freedom Pass” is  on sale for AU$749 and will include benefits substantially similar to Vail Resorts’ Epic Local Pass, with unlimited skiing and riding at Breckenridge, Keystone and Arapahoe Basin in Colorado; Park City and Canyons in Utah; and Heavenly, Northstar and Kirkwood in the Lake Tahoe area of California and Nevada. It also will include 10 days of free skiing and riding at Vail and Beaver Creek in Colorado. All U.S. resort access will be subject to certain holiday restrictions. Upon closing the acquisition, all previous purchasers of the 2015 Perisher Freedom Pass will also receive these new benefits and all Epic Pass purchasers will receive unlimited and unrestricted skiing at Perisher.

“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,” said Katz. “Our Company looks forward to welcoming an even greater number of Australian guests to our domestic resorts to showcase the incredible experience we provide.”

The Company indicated that it expects Perisher to generate incremental Resort Reported EBITDA of approximately AU$20 million (approximately US$16 million) during its first twelve months of operation following the acquisition. The Company expects Perisher to generate positive Resort Reported EBITDA of approximately AU$38 million (approximately US$30 million) during its ski season, June through September, and negative Resort Reported EBITDA of approximately AU$18 million (approximately US$14 million) during its off-season, October through May. Further, the Company expects Perisher to generate approximately US$6 million of free cash flow in its first year of operations, after deducting capital expenditures at the resort, income taxes (both U.S. and Australian) and all interest expense relating to the acquisition. These estimates do not include any incremental benefit of increased visitation to the Company’s U.S. resorts from Australian guests.

At closing, the Company intends to fund the purchase price with cash on hand and the revolver portion of its senior credit facility. Depending upon timing of the closing, the Company will pay the sellers or receive from the sellers the net cash flow of Perisher sinceJanuary 25, 2015. In addition, the Agreement provides that the Company will pay New South Wales stamp duty related to the acquisition, estimated to be approximately AU$4 million (US$3 million). References to U.S. dollars are based upon currency exchange rates currently in effect.

About Perisher Resort
Located in the picturesque Kosciuszko National Park in South Eastern New South Wales, Perisher’s 3,000 acres of skiable terrain, 47 lifts, 7 mountain peaks, 5 terrain parks, more than 100 groomed trails, night skiing and over 100 kilometers of cross-country skiing trails, makes it the Southern Hemisphere’s largest mountain resort.

About Vail Resorts, Inc. (NYSE: MTN)
Vail Resorts, Inc., through its subsidiaries, is the leading mountain resort operator in the United States. The Company’s subsidiaries operate the mountain resorts of Vail, Beaver Creek, Breckenridge and Keystone in Colorado; Heavenly, Northstar and Kirkwood in theLake Tahoe area of California and Nevada; Canyons and Park City in Utah; Afton Alps in Minnesota and Mt. Brighton in Michigan; and the Grand Teton Lodge Company in Jackson Hole, Wyoming. The Company’s subsidiary, RockResorts, a luxury resort hotel company, manages casually elegant properties. Vail Resorts Development Company is the real estate planning, development and construction subsidiary of Vail Resorts, Inc. Vail Resorts is a publicly held company traded on the New York Stock Exchange (NYSE: MTN). The Vail Resorts company website is www.vailresorts.com and consumer website is www.snow.com.