Vail Resorts announced last week that it will be buying Heavenly Ski Resort in California from the American Skiing Company for $102 million.

The ski resort operator owns Vail, Keystone, Beaver Creek and Breckenridge ski areas.

Vail plans to put $40 million in improvements into Heavenly over the next five years. Areas of improvements include lift and food-service operations as well as employee housing. Heavenly operates 29 lifts, seven eateries and has some employee housing units.

Adam Aron, chairman and chief executive officer of Vail Resorts, said his company looks for underpriced blue chip resorts, investing $225 million in acquisitions over the past year.

"Heavenly certainly fits that bill. We think we got a fabulous resort at an attractive price," Aron said, characterizing the resort as "undermanaged, undermarketed and undercapitalized."

In the last year, American Skiing has tried to unload ski resorts -- including Steamboat and Sugarbush -- to improve its cash-flow standings. American Skiing lost $223 million in the last three quarters.

The acquisition fits neatly into a three-year-old growth strategy. In the past 12 months Vail's $225 million in acquisitions include:

-- Heavenly for $102 million

-- The $49 million Marriott's Mountain Resort & Vail

-- The $70 million Rock Resorts luxury hotel management company

Aron ranked Heavenly high in terms of mountain terrain and service. He rated the facilities "pretty low."

"We think the whole lift network needs to be looked at. We're going to put lifts in you'd never dream of," Aron said. "We believe Heavenly can be a much better ski resort."

"In adding Heavenly, we're adding a ski resort in a different weather pattern," Aron said. Since snow varies in different regions of the country, buying properties across the United States helps "double up the bet," he added.

Aron said Vail Resorts is also looking forward to taking over the $25 million Heavenly Gondola, a key component to South Lake Tahoe redevelopment. Vail expects to add another 75,000 passengers in the upcoming years to the 100,000 riders the gondola already accommodates during the summer months.

Vail Resorts may also explore selling a five-resort "buddy" pass that lumps Heavenly with its Colorado ski areas. Aron hopes the addition will boost skier visits at his other resorts. Heavenly's skier visits amounted to 846,000 last year.

Vail Resorts and American Skiing both went public in 1997, when ASC bought Heavenly for $288.3 million. Since then, American Skiing's stock plummeted from $18 to 29 cents before the New York Stock Exchange delisted the company almost two weeks ago. Vail's offering price was $22 a share; today it trades at $21 a share.

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