Vail Resorts has agreed to acquire Crans-Montana Mountain Resort in Switzerland from CPI Property Group (CPIPG) for more than CHF 100 million.
Crans-Montana Mountain Resort, in the Swiss Alps, is one of Europe’s top ski resorts. CPI says it sold for about double the book value.
It includes more than 1,400 meters of skiable vertical terrain and 140 kilometers of trails. Crans-Montana is a renowned outdoor sports destination, with signature events including the Ski World Cup, Mountain Bike World Cup, Omega European Masters and the Caprices Festival. The commune of Crans-Montana has gourmet restaurants and luxury retail stores, as well as stylish five-star hotels, including the recently developed Six Senses lodge and spa, a luxury 45-room ski-in, ski-out chalet-style property situated above the main gondola.
Crans-Montana Mountain Resort is an iconic ski destination
Kirsten Lynch, Chief Executive Officer of Vail Resorts says, “Crans-Montana is an iconic ski destination in the heart of the Swiss Alps, with a unique heritage, incredible terrain, passionate team, and a community dedicated to the success of the region.
“Our acquisition of the resort aligns to our growth strategy of expanding our resort network in Europe, creating even more value for our Pass Holders and guests around the world. Much like Andermatt-Sedrun, we believe Crans-Montana has a unique opportunity for future growth.”
Vail Resorts is acquiring an 84% ownership stake in Remontées Mécaniques Crans Montana Aminona, which controls and operates all the resort’s lifts and supporting mountain operations, including four retail and rental locations. The company is acquiring an 80% stake in SportLife, which operates one of the ski schools at the resort. Vail Resorts is also acquiring 100% ownership of 11 restaurants on and around the mountain.
Vail Resorts plans to include access to Crans-Montana Mountain Resort on select Epic Pass products for the 2024-25 ski and ride season.
Crans-Montana will thrive
David Greenbaum, CEO of CPI Property Group says, “CPIPG is proud to have contributed significantly to the positive development of Crans-Montana over the past 10 years. Vail Resorts is a talented ski resort operator, and we are certain that Crans-Montana will thrive under their ownership.”
In a statement from its Board of Directors, the Association of the Municipality of Crans-Montana added: “Crans-Montana looks forward to working closely with Vail Resorts, which will undoubtedly have a clear, long-term strategy for development, marketing, and providing top-quality guest experience. Vail Resorts will bring new energy to the ski area, positively impacting the entire economic structure of the region of Crans-Montana. Vail Resorts as new owner of the ski area will also have a positive impact on the organization of the FIS Alpine World Ski Championships in 2027 at Crans-Montana.”
Investing to support growth, sustainability and vitality
Kirsten Lynch said, “We look forward to investing to support the growth, sustainability and vitality of the resort and region,” continued Lynch. “We care deeply about the guest experience and are committed to working with the community, listening and learning from local partners and the resort’s dedicated teams. We share many values with the Crans-Montana community, including a commitment to environmental responsibility and reducing our net-operating footprint.”
Vail Resorts expects to drive significant growth for Crans-Montana Mountain Resort through ongoing investments in the resort and inclusion of the resort on Epic Pass products, attracting more international guests.
Leading destination in the Swiss Alps
Bruno Huggler, CEO of the Crans-Montana Tourism and Congress, says, “Vail Resorts commitment to Crans-Montana rewards the Valais destination’s dynamism, innovation, positioning and strategy for high value-added, four-season sustainable tourism. Vail Resorts’ in-depth analyses confirmed Crans-Montana’s potential as a leading destination in the Swiss Alps. Every possible effort will be made to foster synergies with all players from Crans-Montana in developing tourism offers, marketing, and sales. Vail Resorts’ network will be a definite asset, especially in North America.”
Subject to closing adjustments, the valuation for the resort operations is expected to be CHF 118.5 million, including approximately CHF 7 million of debt that will remain in place.
Vail Resorts anticipates that the resort will generate approximately CHF 5 million of EBITDA in its fiscal year ending July 31, 2025, the first full year of operations following the expected closing later in fiscal 2024. Vail Resorts anticipates EBITDA growth over time from the inclusion of the resort on the Epic Pass products, network synergy, and investments in the guest experience.
Crans-Montana Mountain Resort growth
Subject to the timing of capital project approvals and completion, Vail Resorts is planning to invest approximately CHF 30 million over the next five years in one-time capital spending to elevate the guest experience, and the resort is expected to generate over CHF 15 million of annual EBITDA following these investments and including the impact from incremental Epic Pass sales. This initial phase of growth of the resort is expected to be primarily driven by operating and marketing initiatives along with capital investments focused on maximising gastronomy efficiencies and improving and expanding snowmaking capabilities. After closing the transaction, normal annual maintenance capital expenditures for Crans-Montana Mountain Resort are expected to be approximately CHF 3 million.
The transaction is expected to close during the 2023-24 ski and ride season, subject to certain third-party consents. Operations at Crans-Montana Mountain Resort for the 2023-24 winter season will continue in the ordinary course of business. Vail Resorts is committed to retaining the vast majority of employees, the existing operational infrastructure, and local expertise.
In August 2022, CPIPG announced a €2 billion disposal pipeline. Since then, more than €1.5 billion of disposals have been signed, meaning that CPIPG is currently slightly ahead of schedule.
On average, the group’s signed disposals have occurred at a premium to book value.
CPIPG intends to exceed its €2 billion target by August 2024. Assets in the disposal pipeline include residential, office, land bank and hotels in Germany, Austria, the Czech Republic, and also the UK.
