Vail Resorts Inc. on Friday announced that it has entered into an agreement to purchase the ski fields at Falls Creek Alpine Resort and Hotham Alpine Resort in Victoria, Australia.
Falls Creek is Victoria’s largest ski resort and Hotham is the only resort in the Southern Hemisphere where the village is located on top of the mountain, ensuring ski-in, ski-out opportunities from anywhere in the village.
The acquisition, which is subject to certain regulatory approvals, is expected to close prior to the commencement of the Australian snow season in June 2019.
The company will purchase Australian Alpine Enterprises Holdings Pty. Ltd and all related corporate entities that operate Falls Creek and Hotham resorts from Living and Leisure Australia Group (LLA), a subsidiary of Merlin Entertainments, for AU$174 million (US$124.2 million), subject to certain adjustments at closing, including an increase (or reduction) in the price for operating losses (or gains) incurred for the period from Dec. 29, 2018 through closing. The acquisition includes ski school, retail/rental, reservation and property management operations at both resort areas.
“The acquisition of the leading mountain resorts in Victoria is part of our continued strategy to drive season pass sales and build loyalty with guests from around the world,” said Rob Katz, chairman and CEO of Vail Resorts. “After our success connecting with skiers in Sydney and across New South Wales since acquiring Perisher in 2015, we have a huge opportunity to create a deeper connection with Melbourne and broader Victorian skiers and riders.”
“Vail Resorts has a great track record in developing world-class resorts,” said Nick Mackenzie, managing director of Merlin Entertainments’ Midway division. “We’re confident that guests, employees and the surrounding communities of Hotham and Falls Creek will benefit from Vail Resorts’ expertise, investment and know-how, and we wish the teams every success for the future.”
When the transaction closes, the 2019 Epic Australia Pass and 2018-19 Epic Pass will include unlimited, unrestricted access to Falls Creek and is expected to include unlimited, unrestricted access to Hotham, subject to certain approvals.
Vail indicated that it expects Falls Creek and Hotham to generate incremental Resort Reported EBITDA of approximately AU$18 million (US$13 million) during its first 12 months of operation following the acquisition, which assumes normal conditions. After closing of the transaction, annual ongoing capital expenditures are expected to increase by approximately AU$4-5 million (US$3-4 million) to support the addition of these two resorts.
Photo courtesy Hotham Alpine Resort
