Tourism company Skistar is selling its 68 percent stake in the Austrian ski resort of St. Johann to the family-owned Schultz Gruppe. The sale is said to be part of a push to focus more on the Scandinavian market in light of changing travel habits and the ”homestay” trend.
Skistar bought the majority stake in St. Johann for 10 million euros in 2016, with the aim of establishing a European ski resort to complement the Scandinavian destinations. Skistar is selling now because the company has a strategy for the coming years to focus even more on the Scandinavian market in light of changing travel habits and the ”homestay trend”.
Financially, Skistar will receive a repayment of EUR 15 million of the shareholder loan totaling SEK 19.5 million that they provided to St. Johann. In addition, a cash purchase price of EUR 2 million will be paid. The divestment is estimated to have a negative impact on earnings of SEK 110 million.
”"St. Johann has had good development in recent years. It is a business that is doing better today than it was just under five years ago when we acquired the majority stake in the company. We are now focusing our investments and efforts in Norway and Sweden to further develop both the business and profitability in our home market," says Skistar's CEO Stefan Sjöstrand, who only took office as CEO in March 2020.
Do you think it was a bad purchase in hindsight?
”"No, I actually think it has been a learning experience for us as a company and things always happen in the market. When Skistar came in and bought this, the homestay trend was not that strong. Then we have a much stronger position in Scandinavia today with our own products, accommodation options, ski school, ski rental and this year also the summer initiative Sports & Adventures and we have not succeeded in that in St. Johann. In this way, we have not made our business model work in the way we might have wanted there," says CEO Stefan Sjöstrand.
Stefan Sjöstrand is also satisfied that Skistar has turned a previously loss-making facility that was "quite in decline" into a relatively balanced result and has attracted significantly more guests.
”On the other hand, it doesn't fit into our future strategy and then we have to make a choice,” he adds.
Isn't it bad timing to sell in the middle of a pandemic in terms of price?
”"It is clear that you always want to pay more for a business, but we have reached a good agreement with the Schultz family. We could have chosen to keep it for another year, but for us it is much more important to invest in our destinations in Scandinavia," says Stefan Sjöstrand.
He adds that St. Johann is a small part of Skistar's operations. During the 2019/20 financial year, St. Johann had a turnover of SEK 91 million, corresponding to approximately three percent of Skistar's total turnover.
The parties intend to complete the transaction as soon as possible after receiving ”required approvals.” It is expected to be completed before Skistar’s fiscal year-end on August 31.
Source: di.se
