Vail Resorts (MTN) to Buy Crans-Montana Resort in Switzerland


Vail Resorts, Inc. MTN has announced its strategic acquisition of Crans-Montana Mountain Resort in Switzerland, a premier ski destination, renowned for its breathtaking Alpine views and outdoor events.

The deal is expected to close during 2023-2024 ski and ride season, pending specific third-party approvals. Crans-Montana Mountain Resort will operate as usual during the winter season of 2023-24, following the standard course of business.

With an 84% stake in lift operations and an 80% ownership in a key ski school, Vail Resorts aims to leverage its global reach and Epic Pass offerings to elevate the Swiss resort’s international profile.

The deal, valued at CHF 118.5 million ($136 million), positions Vail Resorts for robust growth. The resort’s inclusion in Epic Pass products is expected to attract a broader international audience seeking a luxurious Alpine experience.

Management plans to invest approximately CHF 30 million over the next five years, focusing on guest experience enhancements and snowmaking capabilities. This strategic investment is projected to yield over CHF 15 million in annual EBITDA.

MTN remains committed to retaining local expertise and operational infrastructure. The acquisition aligns with its broader strategy, integrating data analytics, accessibility through Epic Pass products and best practices from its global mountain operations.

 

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Stock Performance

Shares of the company have declined 15.3% in the past year against the industry’s 2.4% growth. High costs are hurting MTN.

In fourth-quarter fiscal 2023, its margins were affected by inflationary labor costs. The mountain segment’s labor-related costs increased 26.3% compared with the prior-year levels. Segmental operating expenses jumped 22.4% year over year due to investments in employee wages and salaries, impact of inflation and incremental expenses associated with Andermatt-Sedrun and Seven Springs Resorts. Moving ahead, management anticipates the inflationary costs to persist for some time.

The company currently has a Zacks Rank #3 (Hold).

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