Vail Resorts to Acquire a Majority Stake in and Operate Andermatt-Sedrun Sport AG, a Leading Swiss Resort
Vail Resorts, Inc. (“Vail Resorts”) acquires a 55% interest in Andermatt-Sedrun Sport AG, which controls and operates all of the resort’s mountain and ski assets, including lifts, most restaurants and a ski school operation. ASA will retain a 40% stake in Andermatt-Sedrun Sport AG, with a group of existing shareholders holding the remaining 5%.
Andermatt-Sedrun is one of the most ambitious resort development opportunities in Europe. Since its initial investment in the resort in 2007, ASA majority shareholder Samih Sawiris has invested more than 1.3 billion francs in the surrounding base area and more than 150 million francs in the ski resort, thus creating one of Switzerland’s leading luxury resorts. ASA’s significant investments in high-end accommodation in the base area include The Chedi Andermatt, a world-class 5-star luxury hotel, the Radisson Blu Reussen, luxury condos, studios and apartments, as well as the development of a concert hall, an 18-course championship golf course and three Michelin star restaurants.
Vail Resorts’ CHF 149 million investment includes a CHF 110 million investment in Andermatt-Sedrun Sport AG to be used in capital investments to improve the guest experience on the mountain and CHF 39 million to be paid to ASA and fully reinvested in real estate developments in the base area. Vail Resorts will assume operational and marketing responsibility for Andermatt-Sedrun Sport AG, with ASA and local stakeholders remaining key board members.
“Entering the European ski market is a long-term strategic priority for Vail Resorts. We are delighted to partner with ASA and invest our capital and resources to support the continued development of Andermatt-Sedrun into one of the premier alpine destination resorts in Europe, with integrated operations in ski lifts, catering and ski school,” said Kirsten Lynch, President and CEO of Vail Resorts. “The significant investments that ASA and the Sawiris family have made in both the base area and the mountain have created a premium experience with significant capacity for growth from guests from Switzerland, the UK United, other parts of Europe and worldwide. We plan to rely heavily on our partners, community members and the Andermatt-Sedrun team and learn from them as we gain experience and understanding of the resort, of its customers and its operations.
“We are proud to add this incredible Swiss destination to our network of world-class resorts and welcome Vail Resorts Epic Pass, Epic Day Pass and Epic Local Pass holders to experience the charming villages, alpine terrain and many resort amenities as we look to create an even stronger offering for skiers and boarders in Europe,” continued Lynch.
The SkiArena Andermatt-Sedrun offers over 120 km of varied terrain and a maximum altitude of 3000 meters through the mountains of Andermatt, Sedrun and Gemsstock, with connected access to Disentis which is independently owned. The ski area stretches over 10 miles of scenic alpine terrain between Andermatt and Sedrun, including the iconic Oberalp Pass, and is connected by the Matterhorn Gotthard Bahn which operates all year round. Vail Resorts’ CHF 110 million capital investment will be used for strategic projects that will significantly improve the guest experience by increasing uphill capacity with elevator upgrades and replacements; improving the quality of the snow surface through improvements in artificial snowmaking; and upgrades and expansions to mountain food outlets. The partners plan to work closely with local municipalities and stakeholders on capital investment plans to obtain necessary approvals and permits for resort improvements.
The business partnership goes beyond a shared commitment to improving the customer experience. Vail Resorts and ASA value safety, sustainability and contributing to the success of their local communities. Notably, both companies have existing individual commitments to protect and preserve the great outdoors – Vail Resorts through its Zero Commitment (net zero emissions and zero waste footprint in all stations by 2030) and ASA via Andermatt Manager (the company’s campaign for sustainable and climate-friendly tourism in the Andermatt region with a goal of zero CO2 emissions by 2030).
“Vail Resorts is the perfect partner for our goal of making Andermatt the premier alpine destination,” said Samih Sawiris, majority owner of ASA. “With Vail Resorts’ additional capital investment in the resort, its deep expertise in successful integrated mountain destination operations, and the destination’s impressive marketing capabilities and customer reach, Vail Resorts will give a significant boost to the development of Andermatt-Sedrun.”
The transaction is expected to close prior to the 2022-23 ski and touring season, subject to certain third party consents. Subject to the timing of the closure, Vail Resorts plans to include unlimited, unrestricted access to Andermatt-Sedrun on Epic Pass 2022-23. Epic Day Pass holders with All Resorts Access will be able to use any of their days in Andermatt, and Epic Local Pass holders will receive five days of unlimited access to the resort. The Epic Pass also offers European access to partner resorts, including five days at Verbier4Vallées in Switzerland, seven days at Les 3 Vallées in France, seven days at Skirama Dolomiti in Italy and three days at Ski Arlberg in Austria, with specific details available. on www.epicpass.com.
The partnership between Vail Resorts and ASA is expected to generate significant growth in Andermatt-Sedrun through continued investment in the resort, further development in the base area and inclusion of the resort in Epic Pass products, attracting a wider population of international customers. at the resort who seek an upscale resort experience in the Swiss Alps. Subject to closing adjustments, the pre-investment valuation for the entire resort is expected to be CHF 215 million, including CHF 54 million of debt that will remain in place, with Vail Resorts acquiring a 55% stake. Vail Resorts expects the resort to generate more than $5 million in EBITDA in its fiscal year ending July 31, 2024, the first full year of operations following the expected closing later in calendar year 2022. Vail Resorts expects significant EBITDA growth over time from the expansion of the Village bed base, mountain investments and capacity extensions, and inclusion of the resort on Epic Pass products. Subject to the timing of approvals and the completion of capital projects, Vail Resorts expects that with its investment of CHF 110 million and the inclusion of the Epic Pass, the resort should generate over CHF 20 million annual EBITDA in five to seven years, including the impact of incremental Epic Pass sales. After the closing of the transaction, the annual maintenance investments for Andermatt-Sedrun are expected to amount to approximately CHF 2 million. This is Vail Resorts’ first investment to operate a resort in Europe, the world’s largest ski market, and the company expects to generate significant growth over time from Andermatt-Sedrun and beyond. widely across the network with the addition of this first European station.
Vail Resorts and ASA plan to continue to operate Andermatt-Sedrun with a local and independent approach retaining all employees, existing operational infrastructure and local expertise. Vail Resorts will selectively integrate areas of expertise from its business strategy, including enhancements to data-driven marketing and analytics capabilities, accessibility with the Epic Pass product line, and sharing of best practices from its portfolio of operations.
A representative of Vail Resorts will assume the chairmanship of the Andermatt-Sedrun Sport AG board of directors, and ASA will appoint the vice-chairman. Winter operations 2021/2022 will continue as planned.