Power of Four to Become the Power of a Lot More

Last week’s announcement that Aspen Skiing Co. is partnering with private equity firm KSL to purchase Intrawest Resort Holdings and Mammoth Resorts made waves throughout the ski world. In fact, the company’s entree into the acquisition and consolidation game (the Aspen/KSL partnership will boast 16 ski areas among them when the deals are completed) is probably the biggest splash the North American resort industry will feel in many years.

Here’s what you need to know about the acquisitions, some thoughts from Aspen Skiing Co. COO David Perry, and what others are saying about it.

  • Announced April 10, a new entity formed by a partnership between Aspen Skiing Co. and KSL will acquire Intrawest Resort Holdings in a deal that’s expected to close by the end of September 2017. Two days later, the acquisition of Mammoth Resorts was announced with the same players and same timeframe.
  • The acquisition of publicly traded Intrawest is valued at approximately $1.5 billion. Intrawest stockholders will receive $23.75 in cash per share (a 40% premium over Intrawest’s stock price in January 2017 when rumors first surfaced of a potential acquisition).
  • Mont Tremblant

    Mont Tremblant

    Intrawest owns Steamboat and Winter Park in Colorado, Mont Tremblant in Quebec, Stratton in Vermont, Snowshoe in West Virginia, and Blue Mountain in Ontario, Canada — plus Canadian Mountain Holidays, a heli-skiing company.

  • KSL Capital Partners, a private equity firm specializing in travel and leisure, controls Squaw Valley and Alpine Meadows in California, which will become part of the new partnership but will continue, for now, to operate under current management. KSL is also Skico’s partner, along with East West Resorts of Avon, in the new ownership of Snowmass Base Village.
  • Mammoth Resorts, which is privately owned, includes Mammoth Mountain Ski Area, Snow Summit, Bear Mountain and June Mountain, all in California. Details of that deal, also expected to close by the end of the third quarter, have not been disclosed.
  • Season passes products will continue to be honored for the 2017-’18 winter season at all resorts involved in both deals, including multi-resort products like the Mountain Collective, Rocky Mountain Super Pass, and M.A.X. Pass.


Squaw Valley

Squaw Valley

After letting the news sink in for a few days, we asked David Perry, COO of Aspen Skiing Co., to give us some of the bigger-picture reasoning behind the deals.

Perry explained that the company has been well aware for years that “connected groups of resorts” are what guests are increasingly looking for, including Aspen’s. “As much as our guests love Aspen Snowmass, they’re not monogamous,” he noted.

The answer to how to cater to guests’ travel patterns came in the form of the Mountain Collective, a multi-resort pass product created by Aspen Skiing Co. that launched in 2012 and now includes 16 independent resort worldwide.

The Mountain Collective has been very successful, Perry said. “We learned a lot, and we found we had a lot in common with other resorts.” Then, with the consolidation trend in the ski industry not slowing down over the past few years, “we saw we had a lot of competition, and thought maybe this would be a good time to branch out as the next step in our business.”

Now that Aspen Skiing Co. is becoming a major player in the destination resort world, what does that mean for the future for Aspen Snowmass?

Perry bets that “not a whole lot will change in Aspen Snowmass.” He sees more potential for back-of-house changes, such as investments in technology that can improve access to information and purchasing, and create efficiencies across the resorts.

Otherwise, Aspen Skiing’s approach to the acquired resorts will be different, Perry says, than the trend to standardize resorts under new ownership. The collection of resorts will provide guests with several very different options.

“Each destination is very unique and special,” Perry said, noting, for one, their geographical diversity and the populations they serve. “We want to focus on their individual characters and do a better job at growing them into what they are.”


Mammoth Mountain. Photo by Ed Cesnalis

Mammoth Mountain. Photo by Ed Cesnalis

Reporting on the first announcement about the Intrawest acquisition, SKI Magazine’s editors dubbed it a “mega-merger.”

Noting that the acquisitions expand Aspen Skiing Co.’s reach to the East Coast, Canada, and California, SKI also commented on the Colorado-based Aspen/Vail rivalry (for the record, Aspen will have 16 ski areas under its belt compared to Vail Resorts’ 14): “The merger also makes Colorado the hub of the red-hot battle of consolidation as Aspen/KSL gains traction against Vail Resorts in the fight for winter market share, and also in the key area of future growth of summer resort business. … “[T]he new collective marketing muscle of Aspen and KSL [is] undeniably taking on Vail Resorts’ leadership position in the resort industry.”

Also speculating on the business reasoning behind the deals, the Aspen Daily News spoke to financial experts in Aspen.

“Chris Ryan, principal of Ryan Investment management in Aspen, said SkiCo/KSL’s strategy appears to be ‘bigger, better and branding’,” reporter Madeleine Osberger wrote in this article.

Another financial analyst pointed to Vail’s stock price, which has jumped over the past year after several acquisitions and seems to be reflective of the attractiveness of mountain resorts to investors.

The Aspen Times’ Scott Condon spoke to multiple ski industry experts, who had differing opinions on the urgency for Skico to enter into the acquisitions race.

Mac Clouse, professor of finance at the Daniels College of Business at Denver University, told the Times that cutthroat competition in the ski industry, most notable from Vail, likely forced Aspen’s hand.

The Times quoted Clouse as saying, of Skico: ”I think they’re perhaps seeing how things are being successful for Vail and if they don’t start getting in now, it might be too late. … Vail is seemingly looking to expand as well and these are some prime areas that Vail could have taken over.”

But others, such as John Norton, a former Aspen Skiing Co. COO who now works in Crested Butte, said that while he understood the concern, “he felt Aspen-Snowmass was one of the few independent ski areas that could thrive in the ski industry without consolidation.”

Whatever the forces behind it, Clouse said that consumers benefit from ski resort consolidation, especially now that its two biggest players will have to go head to head offering competitively priced passes for 30 resorts.

“I think we’ll probably see more consolidation,” Clouse told the Times. “The scary thing for the industry would be if Vail and the Aspen group merged.”



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