ASC, MeriStar merge
Park Avenue Redevelopment gained a financial boost on Monday.
American Skiing Company, the parent organization of Heavenly Ski Resort, announced a merger with MeriStar Hotels and Resorts, Inc. to form Doral International. The company will be based in Washington, D.C.
In addition, MeriStar Hospitality, which has a strong association with MeriStar Hotels & Resorts, has committed $25 million to the Grand Summit Resort Hotel at Heavenly.
“I think it’s great because of the infusion of capital which ASC undoubtedly needs, and it keeps the (Grand Summit) on track,” said Mayor Tom Davis.
The merger will diversify the company, which will include year-round beach and ski resorts, hotel management, real estate, golf, tennis and other leisure amenities.
ACS owns nine ski resorts including Heavenly, Canyons in Utah, Steamboat in Colorado and six others in New England.
MeriStar Hotels & Resorts manages about 230 hotels and 11 golf courses, located primarily in Florida. Other concentrations are in California, Texas and along the East Coast – 106 of the hotels are owned by MeriStar Hospitality.
Executives of both companies expressed hope the financial stability of MeriStar will compliment ASC, which is revenue-dependent on weather conditions.
“ASC has a tremendous platform from which we can grow, and we bring in some stability,” said Paul Whetsell chairman and chief executive officer of MeriStar Hotels & Resorts.
Les Otten, chairman for ASC, said the last two winters have been among the worst for ASC. The company lost $52.5 million last year.
Completion of the merger is expected in the first quarter of 2001, officials said. Changes within the company are not expected to affect ski resort operation this season. But an official said a management team will be taking a look at how to run Doral International most efficiently, given the resources of both companies.
How this could effect executive positions has not been specified, but Whetsell said that most streamlining should occur in “back-office positions,” such as accounting and purchasing. The cutbacks are expected to save between $2 and $4 million.
MeriStar is expected to hold 32 percent to 39 percent of the company, with the remainder belonging to ASC. Oak Hill Capital Partners, which pumped $150 million into ASC last summer, will own a significant share of the merged company.
Otten, the chairman of ASC, will assume the same role with Doral. Other board members will include Whetsell and John Emory, chief financial officer for MeriStar, and four members of Oak Hill. Additional members will be selected to the 11-person board.
Doral will comprise nine ski resorts, management of 246 hotels, 23 resort hotels, 15 golf courses, four conference centers, 3,700 units of corporate housing and a real estate division.
Executives are estimating to service 23 million customers in 2001.
The company will have assets of $1.2 billion and estimated of revenues of $600 million.
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