Vail Resorts' acquisition of properties in Swiss Alps is expected to boost results

Bank of America said it is constructive on Vail Resorts' (NYSE:MTN) recent acquisition of Crans-Montana in the Swiss Alps for $143M. Despite the headline valuation seen being as high as 6X the estimated FY24 EBITDA of $6M, the accretive benefits are expected to be an earnings driver.

Analyst Shaun Kelley said the Vail Resorts (MTN) pickup is a thoughtfully sized investment to increase its foothold in the largest ski market in the world. The firm estimates Andermatt-Sedrun and Crans-Montana represent about one million annual skier visits and just 0.5% of total European annual skier visits, which is noted to leave the company a long runway for future growth with the properties.

Kelley noted that at a total cost of $177M including investments, the acquisition can be funded through MTN's cash and is much smaller than MTN’s annual free cash flow generation of ~$500M.

More details on the acquisition: Crans-Montana Mountain Resort spans approximately 4,593 feet of skiable vertical terrain, and 140 kilometers (approximately 87 mi) of trails. Accessible from five airports and by train, Crans-Montana Mountain Resort is located in the Valais canton of Switzerland, approximately two and a half hours from Geneva and less than four hours from Milan and Zurich. The resort is two and a half hours away from the company's other owned and operated European resort in Andermatt-Sedrun. Vail Resorts (MTN) 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 a broader population of international guests to the resort who are seeking a high-end destination resort experience in the Swiss Alps.