Friday, April 14, 2017
Steamboat Springs Aspen Skiing Co.'s second in command said Wednesday the deal to acquire Mammoth Resorts and Intrawest is a logical extension of a business strategy it has pursued for the past five winters.
Skico Chief Executive Officer David Perry said it's a growing trend in the travel and leisure industry to bundle experiences for people who want to gain new experiences and try new things. Skiing is no different, he said.
"Our guests here at Aspen-Snowmass, we've learned they increasingly like to move around a little bit," Perry said. "They are very loyal to us. They love it here, but they also love to visit other places."
That's what led Skico to take the initiative on the Mountain Collective pass for the 2012-13 season, when four iconic ski resorts teamed on a multi-resort ski pass. That has continued to grow each season, and Skico is taking that concept a step further with acquisitions of ski areas.
"When we look at these acquisitions, we think there is a way to continue on that path, which is providing skiers what they're looking for," Perry said.
Skico made a huge leap into that strategy this week. After announcing Monday it was forming a new entity with a partner to acquire Intrawest Resort Holdings and its six ski areas, Skico announced Wednesday it's buying Mammoth Resorts and its four ski areas in California.
Affiliates of Skico and Denver-based KSL Capital Partners will form a new entity to make the purchases. Both deals will be completed by the end of the third quarter this year.
The acquisition of the publicly traded Intrawest is for $1.5 billion. No price was announced for the acquisition of the privately held Mammoth.
Skico officials said not to expect a shared pass among the new family of resorts for 2017-18. Some passes are already on sale for next season, including the Mountain Collective that Aspen and Mammoth are part of and the M.A.X. pass that includes Intrawest.
Skico and KSL started exploring the two acquisitions at about the same time, according to Perry. He said the purchase of Mammoth Resorts makes good business sense because of its commanding position in the southern California market.
"It's a really great ski area. It's a wonderful community," Perry said. "It also is, basically, the dominant player in the largest destination skier market in the country, if not the world."
The firm that owns Mammoth Mountain and June Mountain added Snow Summit and Bear Mountain in 2014. They combined to log more than 2 million skier visits last season.
To put that into perspective, Aspen Skiing Co.'s four ski areas typically log between 1.4 and 1.5 million skier visits per season.
Perry said Mammoth Resorts draws both day skiers and destination guests, who take overnight trips.
"Their geographic position and their dominance in such a large market was the reason we wanted them to be part of the family."
Skico's familiarity with Mammoth in the Mountain Collective Pass led to the merger. Mammoth joined the pass the second year it was available.
"We really learned that we see eye-to-eye on many things," Perry said. "The different strengths that they bring to the table are complementary to ours."
He said Mammoth and its ski areas are special places with individual character and passionate customers. They also run their businesses very well.
"We got to know them a little better over the last three or four years," Perry said. "So when this opportunity came up, it looked like a good one."
Aspen Skiing Co.'s four ski areas and other assets will continue to be owned separately by the Crown family from the new entity. Affiliates of Skico and KSL will lead the new entity that owns the other ski areas. That entity hasn't been named yet, but some media have labeled it "the Aspen group."
Perry said the name will be determined by the time the deals close in the next 90 to 120 days. All the effort was put into getting the complex deals completed, he said. Details such as the name and a common pass are yet to be worked out.
"There's a lot to do between now and closing," he said.
Skico and its affiliates clearly have the potential to create a pass to rival Vail Resorts' popular Epic Pass. The Epic is good at 13 ski areas that Vail Resorts owns or operates in North America, with additional benefits overseas. The price is $859 for next season.
The Aspen group's family of resorts will include Skico's four mountains, the four of Mammoth, six of Intrawest and KSL's holding of Squaw Valley and Alpine Meadows, California. Intrawest's holdings include Steamboat and Winter Park.
Perry said there are clear advantages of a shared pass. Some of the ski areas in the Aspen group are close to major metropolitan areas and provide opportunities for day skiers.
"They can't get their dream trip all the time, but they need to feed their habit," Perry said.
Now those resorts will be affiliated with destination resorts, such as Aspen-Snowmass, where people want to go for overnight vacations.
It is uncertain at this point if Skico and its sister resorts will remain affiliated with the remaining independent resorts in the Mountain Collective after next season.
While the acquisition of Mammoth Resorts helps Skico achieve one of its goals, it will also help those ski areas continue their maturation. Mammoth Resorts Chairman and CEO Rusty Gregory said joining the new venture is "the next logical chapter in the story of Mammoth Resorts."
"This new platform, built around a collective passion for the mountains and our commitment to the people who visit, work and live there, is exactly what the ski resort business needs," Gregory said in a statement. "I am excited about the future prospects for Mammoth Resorts, our people and this new enterprise."
KSL Capital Partners CEO Eric Resnick said the merged company will provide advantages for Mammoth's customers.
"This transaction will allow the combined company to better serve Mammoth's loyal customers while at the same time exposing these world class resorts to a broader audience," Resnick said. "Mammoth Resorts does so many things well. We are excited to learn from their talented team."
An affiliate of Starwood Capital Group has owned a majority interest in Mammoth Resorts for 12 years, according to the statement. Starwood is a private alternative investment firm with a core focus on global real estate, energy infrastructure and oil and gas.
Starwood Capital made chairlift upgrades and purchased Bear Mountain and Snow Summit to help cement Mammoth Resorts' position in southern California, according to Starwood CEO and Chairman Barry Sternlicht.
"We had greater plans for Mammoth but the Great Recession and then some less favorable weather interfered with our strategic aspirations in a finite lift investment vehicle," Sternlicht said. "We know Aspen and KSL have the experience, commitment and balance sheet to help make our vision a reality."
Mammoth Resorts also owns the Tamarack Lodge and Resort, Mammoth Mountain Inn, Juniper Springs Resort, the Village Lodge, Mammoth Mountain Bike Park, Snow Summit Bike Park, Mammoth Snowmobile Adventures, Sierra Star Golf Course and Bear Mountain Golf Course.