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Vail Resorts (VR) has agreed to acquire its first international mountain resort, Perisher Blue Ski Resort in New South Wales, Australia, for AU$176.6 million (approximately US$136 million). The acquisition is expected to close in the fourth quarter of fiscal 2015 following the satisfaction of certain conditions.
Perisher is the largest and most visited ski resort in Australia, 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 includes the resort areas known as Perisher Valley, Smiggin Holes, Blue Cow and Guthega, along with the ski school, lodging, food and beverage, retail/rental and transportation operations which together comprise Perisher. In all, Perisher includes 3,000 acres of skiable terrain, 47 lifts, 7 mountain peaks, 5 terrain parks, more than 100 groomed trails, night skiing and more than 100 kilometers of cross-country trails.
VR 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 of our first international mountain resort is a significant milestone for our company,” said Rob Katz, VR chairman and CEO. “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.”
To that end, Perisher has re-opened season pass sales for its upcoming ski season, which is set to open on June 6. Perisher’s “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 most VR resorts, and 10 days at Vail and Beaver Creek—subject to certain holiday restrictions. 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.
VR expects Perisher to generate incremental resort reported EBITDA of approximately AU$20 million (approximately US$16 million) during its first 12 months of operation following the acquisition, and approximately US$6 million of free cash flow in its first year of operations. These estimates do not include any incremental benefit of increased visitation to VR’s U.S. resorts from Australian guests.
