The rumors began swirling recently that Vail Resorts was looking to expand its portfolio east, and Stowe Mountain Resort was its target. The rumors were true. Vail Resorts is acquiring all of the assets related to Stowe’s mountain operations, including base area skier services (food and beverage, retail and rental, lift ticket offices and ski and snowboard school facilities) at Mount Mansfield and Spruce Peak from Mt. Mansfield Company at Mount Mansfield and Spruce Peak from Mt. Mansfield Company, Inc.—a wholly-owned subsidiary of American International Group (AIG)—for $50 million.
Other facilities such as the 312-room Stowe Mountain Lodge, Stowe Mountain Club, Stowe Country Club and certain real estate owned and held for potential future development will be retained by MMC.
Vail Resorts CEO Rob Katz complimented AIG for the many on-mountain infrastructure improvements and the base area facilities that have been built over the last decade, which represent an overall investment of roughly $500 million by AIG. “We look forward to working with AIG to continue enhancing the guest experience and to ensure the resort’s long-term success,” said Katz.
Douglas Tymins, president and CEO of AIG Global Real Estate, said, “Under Vail Resorts’ management, Stowe’s reputation as a premier ski destination with a commitment to excellent service will continue to grow. AIGGRE is looking forward to combining Vail Resorts’ tremendous mountain operations capabilities with our continued commitment to the development of the Spruce Peak community.”
The transaction is subject to Vermont administrative review. At closing, the purchase price will be adjusted for certain agreed upon terms, including the purchase price by the amount that the resort’s EBITDA exceeds capital expenditures for the period from Nov. 1, 2016, through closing. Stowe Mountain Resort is expected to generate incremental annual EBITDA in excess of $5 million in Vail Resorts’ fiscal year ending July 31, 2018.
According to Vail Resorts, operations at Stowe will remain status quo for the remainder of the 2016-17 season, as will future summer and winter seasonal hiring. The company also said it “will be retaining the vast majority of the resort’s year-round staff.”
Vail Resorts plans to include Stowe on its Epic Pass and other season pass products for the 2017-18 winter season, subject to the acquisition closing.