Game changer: Steamboat Ski Resort acquired by Aspen Skiing Co., KSL Capital Partners in $1.5B deal | SteamboatToday.com

Game changer: Steamboat Ski Resort acquired by Aspen Skiing Co., KSL Capital Partners in $1.5B deal

Editor’s Note: This story was updated at 4:14 p.m.

Steamboat Ski Resort has embarked on a new chapter in its 54-year history, with the news Monday morning that 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 and 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.

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“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,” Perlman continued. “We look forward to continuing to improve operations and guest experience, and building off the strengths we already have at Steamboat."

Perlman also had reassuring words for Steamboat Ski Resort followers who might be concerned the transaction signals a change in the qualities that define Steamboat as a community and a resort.

"It goes back to the fact that both KSL and Aspen recognize the individual assets and unique brands that make up the Intrawest portfolio, and especially Steamboat, with its iconic brand and heritage and maintaining that going forward," he said.

The deal goes beyond the competitive advantages of bringing Steamboat, Aspen, Squaw/Alpine Meadows 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 Steamboat/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."

David Baldinger, Jr., a principal at Steamboat Sotheby's International Realty, who has been involved in public improvements at the base of Steamboat Ski Resort, was encouraged by the news of Steamboat aligning with an expanded ownership group.

"I think this is fantastic news," Baldinger, Jr. said. Aspen and KSL "are both experienced operators and financiers and that is absolutely what most people hoped for if the sale happened, because they know the business they are buying (in Steamboat)."

He added he would have been concerned if a hotel chain or wealthy financier had purchased the ski area or the entirety of Intrawest, potentially leaving it on an island, in the midst of the ongoing consolidation in the ski resort industry. The advantages offered by KSL and Aspen Skiing Co. are that they are prepared to join with Intrawest in long-term business planning in the near term, Baldinger, Jr., said.

Realtor Jon Wade, principal in the Steamboat Group, expressed admiration for Aspen Skiing Co.'s corporate culture.

"I'm encouraged by how good of a community member Aspen Skiing Co. is considered to be for donations, affordable housing and environmental efforts," Wade said. "They’ve set a high bar."

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.

And there is a Steamboat/Squaw connection in the persona of former Intrawest and Steamboat Ski Resort marketing executive Andy Wirth, who is intimately familiar with the Steamboat Ski and Resort Corp. business model.

Wirth left Steamboat Ski Resort, 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.

To reach Tom Ross, call 970-871-4205, email tross@SteamboatToday.com or follow him on Twitter @ThomasSRoss1

Status of 2017-18 ski passes unchanged

For the full 2017-18 winter season, each Intrawest resort will continue to honor the resort’s existing pass products that are currently on sale, including the Rocky Mountain Super Pass + and the M.A.X. Pass.

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