STEAMBOAT SPRINGS — 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. Both Aspen and KSL are committed to helping Intrawest accelerate our plans to bring more value to our guests, more opportunities for our employees and more investment into our local communities."
Under the terms of the merger agreement, Intrawest stockholders will receive $23.75 in cash for each share of Intrawest common stock, representing a total valuation of approximately $1.5 billion including debt obligations to be assumed or refinanced net of cash at closing.
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 can be expected to be significant feeder markets for both the California and Colorado ski areas under the Steamboat/Aspen/KSL group.
"We are committed to honoring the deep traditions of each resort, while working with Intrawest's talented management team and employees to continue to serve both their guests and local communities," said KSL CEO Eric Resnick in a news release.
David Baldinger, Jr., a principal at Steamboat Sotheby's International Realty, who has been involved in public improvements at the base of Steamboat Ski Area, was encouraged by the announcement.
"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."
Aspen Skiing Co. CEO and President Mike Kaplan said the acquisition will help Aspen Skiing Co. in ways such as recruiting and retaining employees, as part of a bigger effort, and in creating up-to-date technology that consumers demand. Some marketing initiatives will also be explored in the future, he said.
Even with a stable of sister resorts, Aspen Skiing Co. will maintain independence, Kaplan stressed.
“The independent spirit will be alive and well in Aspen,” he said.
The transaction is expected to close by the end of the third quarter of 2017.
Denver-based KSL Capital Partners is the owner of the Squaw Valley and Alpine Meadows in the Lake Tahoe region. Aspen Skiing Company 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 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.
UPDATE: This story has been updated with additional information.