$1.5 billion deal rocks ski industry as Aspen skico, KSL Capital Partners buy Intrawest
April 11, 2017
Intrawest Resorts Holdings, Inc., has been acquired by ski resorts operator Aspen Skiing Co. LLC and private equity firm KSL Capital Partners LLC for about $1.5 billion, including debt.
"This transaction creates significant opportunity for Intrawest and delivers tremendous value to our current shareholders," said Intrawest CEO Thomas Marano in a news release. "We are excited to work with Aspen and KSL. Our new partners bring additional financial resources and a shared passion for the mountains and our mountain communities."
Under the terms of the merger agreement, Intrawest stockholders will receive $23.75 in cash for each share of Intrawest common stock. The deal is expected to close by the end of the third quarter of calendar year 2017.
Steamboat Ski & Resort Corp. President and Chief Operating Officer Rob Perlman said he anticipates the different resorts in the new company will be able to collaborate in a number of areas including events and marketing programs.
"It does creates some exciting opportunities going forward," Perlman said Monday. "I expect we'll have some exciting discussions about future opportunities pretty quickly once the deal closes.
"The two entities forming the new entity, KSL and Aspen Skiing Co., clearly understand the ski business and bring substantial resources to the new company," said Perlman.
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The deal goes beyond the competitive advantages of bringing Squaw Valley, Alpine Meadows, Steamboat, Aspen and Winter Park together under the same management, including the synergies that offers in multi-resort season passes. The new group also acquired Tremblant in Quebec, Blue Mountain Ontario, near Toronto, Stratton in Vermont and West Virginia's Snowshoe, with its proximity to the Washington, D.C. market.
As Vail Resorts has continued to gobble up large ski resorts and pursue dominance with its Epic Pass, other destination resorts have felt the pressure to compete or become marginalized. The eastern ski areas maybe be counted on to be significant feeder markets for both the California and Colorado ski areas under the Intrawest/Aspen/KSL group.
Former Steamboat Ski and Resort Corp. President Chris Diamond, who consults in the industry, said it's likely the newly allied ski resorts will leverage their combined strength to take on Vail Resorts' Epic Pass.
"If you look at (the deal) in that context, Intrawest, plus the four Aspen resorts and two California resorts … and clearly you have a very attractive competitive product to what Vail offers, no question," Diamond said. "I think that Vail has a huge advantage in Western Canada."
Denver-based KSL Capital Partners is the owner of the Squaw Valley and Alpine Meadows in the Lake Tahoe region, and Aspen Skiing Co. owns and operates Snowmass, Aspen Mountain, Aspen Highlands and Buttermilk.
There is a Steamboat/Squaw connection in the persona of former Intrawest and Steamboat Ski Area marketing executive Andy Wirth, who is intimately familiar with the Steamboat Ski and Resort Corp. business model.
Wirth left Steamboat Ski Area, where he had been senior vice president of sales and marketing, in late July 2010, to step up to the CEO role at Squaw. Technically, he had come to Steamboat in 2009, after two years as Intrawest's chief marketing officer and executive VP of sales and marketing for the parent company, in Vancouver, British Columbia.
KSL's corporate literature indicates it has a capacity to "unilaterally invest several hundreds of millions of equity in a single transaction."
"While our typical targeted minimum equity requirement for the fund is $25 million, because of the nature of our portfolio companies, related entities and our desire to grow these businesses, no transaction is too small to execute. We have the ability to unilaterally commit up to $400 million of equity in any one transaction," the company reports.
According to KSL, the "firm's capital is generally funded by a combination of public state and corporate pension funds, private and university endowments, high net worth individuals, fund of funds and other financial institutions."
A sampling of KSL's portfolio of non-ski area properties includes: The Belfry conference and golf destination in England, Outrigger Hotels and Resorts with 6,500 rooms in Hawaii and the South Pacific, and East West Partners, with $3 billion of residential and commercial real estate, including Colorado ski country.