Intrawest sells to Aspen and KSL

Discussion in 'General Skiing' started by SBrown, Apr 10, 2017.

  1. Lorenzzo

    Lorenzzo Snow Skier Skier

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    So with numbers like that, why don't we hear anything about Okemo? Is it like skiing Vail or voting for a certain presidential candidate where people keep it secret? I came out of the closet on Deer Valley.
     
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  2. fatbob

    fatbob Out on the slopes Skier

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    Density doesn't tell the full story - most of Beaver Creek feels significantly less crowded than Heavenly because of mountain layout, convergence points etc. Interesting that out of the new set up only Snowmass and Steamboat are posting drive up type numbers and Squaw isn't on the chart. Long way to go to compete with Vail even allowing for the absence of Canada from the chart.
     
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  3. DanoT

    DanoT Getting off the lift Skier

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    I think the Intrawest acquisition is at least partly skier visit driven. Aspen is the least crowded of any major US resort (with Big Sky being the possible exception). How many resorts can you make untracked boot top and shin deep powder turns until noon on a Saturday?....you can at Snowmass because there are not a lot of skiers per acre as Ken R has pointed out with his graph.

    The newly acquired Blue Mountain and Mont Tremblant are the main day skiing resorts for Toronto and Montreal, Canada's two largest cities with a total population of over 16 million or 45% of Canada's population of 36 million.

    What is the population of Tahoe's drive to catchment area? I bet it is 10million+..
     
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  4. Ken_R

    Ken_R Getting off the lift Skier

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    Exactly. There are many factors like amount of Hotel / Lodging, facilities and amenities, accessibility from major metro areas and airports and a bunch more and cost/value. Vail scores pretty high in all of those and others. The EPIC pass is a HUGE draw and everything else feeds from it.
     
  5. tam

    tam ❄❄❄❄❄ Industry Insider

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    Just keep driving north...
  6. WheatKing

    WheatKing Putting on skis Skier

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    Lol... Blue mountain supposedly has 750,000+ visits per year on 364 acres.. That's a density (according to the other chart) of 2060 per acre..

    I don't visit blue on the weekends.. for good reason.

    Tremblant is 630 acres but no idea how many skier visits, supposedly 2nd most in Canada.. and Whistler/Blackcomb.. which Vail already owns.. is supposedly #1 in Canada.
     
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  7. nay

    nay low C turns Skier

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    IMG_4977.PNG

    Ok - so why? Why is Aspen better together with Steamboat and WP and a collection of eastern resorts?

    If they don't use a common pass to draw destination skiers - precisely what Vail is doing - then what is the "together" part? The FAQ in that article is all about pass products, and it only says "no changes for next season".

    I get this could purely be a money play, and that's KSL's business, but Aspen?

    You know that kids song that goes "Which one of these things is not like the other? Which one of these things just doesn't belong?"
     
  8. nay

    nay low C turns Skier

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    Don't forget about plush slippers.

    IMG_5253.JPG
     
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  9. Lorenzzo

    Lorenzzo Snow Skier Skier

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    I didn't mean to sound dogmatic before about operating fundamentals not being an important part. But here it doesn't need to be for this transaction to get done. A 40% pop is enough to incentivize any capital group, particularly private capital, to do this with no further incentive.

    I also would point out consolidation is only one of the possible strategic responses to Vail but it certainly is one of them. As are strategic alliances, i.e. MCP, as is accumulation of assets to compete directly against Vail. I do think the decline in skier day factor is not as much a threat to upper tier resorts as some might argue. We're coming out of an extended recession, the metric isn't affecting resorts evenly, etc. This transaction given the premium being paid to stock shares is not defensive it's optimistic.

    So why is the premium being paid? Is it to improve fundamentals and compete against Vail? Is it because there's an enormous bump in value through leverage that could not otherwise be accessed? Is it even identifiable to us?

    We could be more certain as to which if we really knew the ownership structure here. Control may be changing little, almost not at all or completely. This could be nothing more than going private with KSL and Aspen having little or no ownership stake or they could have the whole thing. The difference between strategic alliance and change in ownership and control becomes easily blurred making conclusions about consolidation difficult from afar.

    My best guess, based on my understanding of private equity today is they'lll access a position figuring a benefit from the stock price, plan on a 10 year horizon and figure out how to grow value during that time. They'll hope they can either take on Vail directly or carve out a niche or pass Vail when Vail fails at meeting growth expectations which will happen. Normally they would insist on control of eventual asset sales but with the 40% maybe not. 40% is enough by itself to get this deal done with no other ups and it is definitely attributable to the value of debt being accessed. That said no investment pro would ever admit that.

    If you look at KSL's holdings there are examples of successful sales around 10 years and those that also languished . They bought Club Corp. in the golf world for an upfront pop knowing it was in a declining industry but it didn't matter they made their money upfront. If the recent past teaches anything it's that capital flows in and out of debt and between public and private overwhelm all other factors during capital windows like this, looking at yields. An analogy might be a big storm during a drought year.

    So now to your question about Aspen. Let's say you're them. If you choose to grow then how? One way would be to use funds from the owners and the value of what they now own and acquire assets or stakes within them. Another would be to take their brand and obtain management contracts. The former involves risk, the latter does not. My suspicion here is they are mostly or completely acting as a manager. It doesn't mean they won't get a piece or that they won't invest anything. But it would be a smart way to approach and grow their business. The Vail bogey doesn't just stand for scale it also involves consistency and efficiency of operations. The Aspen brand is certainly worth something here. Compare it to Vail resorts LOL. (I try to avoid texting abbreviations like that but it just fits too well here. Or maybe ROFL., etc.)

    There are also structural aspects given KSL and the private equity source that would make it unlikely Aspen would have a meaningful financial stake. This is something perhaps Bob at some point can illuminate. It's likely equity wanted their brand and is happy to give them management.

    Aspen would then have an increased incentive to build its brand and I would expect advertising as you have attached above to reflect that. Bob and his associates would have advancement and managerial opportunities, The organization would get to grow and unlike Vail they could pay for and attract excellence. it would be good business for Aspen to focus on risk-free bottom line that creates personnel growth health. If this all had the additional benefit of increasing traffic at Aspen then yes an added incentive, and vehicles for doing this are limitless, but without that the management avenue would still make sense and this will still have "made Aspen better."
     
  10. CalG

    CalG Putting on skis Skier

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    Trying to be generous! ;-)
     
  11. SBrown

    SBrown Chuck Norris Admin Pugski Ski Tester

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  12. Lorenzzo

    Lorenzzo Snow Skier Skier

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    Ok..got some intel. Buzz and logic are aligned. Goldman key investment banker. Debt driven with KSL the major player, Aspen brought in for brand and to explore combat alternatives. Day to day control Aspen, long tern and financial control KSL. Interwest not completely out. Money raised for capex and OS for future acquisitions, in fact Mammoth just announced. Aspen will be the face, brand and joint owner much like I own Facebook. Intention is to outmaneuver and differentiate from VR, taking advantage of private flexibility as compared to VR which reports and which the street considers to have a weak brand.
     
  13. Andy Mink

    Andy Mink Experience level may vary during the run Skier

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    Watching the concerns of long time Squaw enthusiasts this year regarding the leadership put in place by KSL, I think this is a valid concern. Bigger doesn't necessarily equal better. But I try and keep in mind that, most likely, a very large majority of skiers don't know about or care about Vail/KSL and who's buying whom. They want to get to their vacation spot, get some runs in, and get home. So will these deals make a huge difference to the majority of skiers? Probably not. Most likely only the "hard core" folks will even notice a difference.
     
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  14. Muleski

    Muleski Out on the slopes Industry Insider

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    Yep. It sure is. As we are seeing, it's just beginning. More dominos to fall over the next 6 months or so.

    I'm picking up on the same general scenario as @Lorenzzo. Great Intel, BTW. What initially had we surprised was Aspen's involvement. I would bet money that this is all about branding, cachet, and the top end customer experience. I will be interested to see just how the operations side of things unfolds, and how they hang their ultimate portfolio of resorts together.

    Yes, still early. More to come, no doubt. Should be an interesting year.
     
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  15. Bob Barnes

    Bob Barnes Getting off the lift Instructor

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    <<the unique flavor of some resorts might vanish>>

    Certainly, this fear is uppermost in the minds of many concerned people (myself included). But knowing how important uniqueness and the "Aspen Idea" is to Aspen--the Ski Company, the City, and the community--and trying to read between the lines of press releases and statements by SkiCo CEO Mike Kaplan, I am hopeful and reasonably confident that maintaining this uniqueness will remain a very high priority. It is Aspen's most valuable asset. Knowing many of the players (owners and upper management), I know that they will not easily let this core value go. It is inconceivable (almost).

    Best regards,
    Bob
     
  16. markojp

    markojp mtn rep for the gear on my feet Instructor Industry Insider

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    I'm hoping the Aspen ideals regarding the social sustainability of industry employment hit the ground running, spread, and pressure the rest of the industry toward a model that places some small bit of value on the worth of their employees both professionally and as human beings.
     
  17. Muleski

    Muleski Out on the slopes Industry Insider

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    That would be great. I am hearing a bit of a shift from their Squaw experience, and likely some emphasis on human capital, top quality staff, retaining them, and making them energized. In effect the high end top quality experience. That normally does not align with low price. It clearly does not align with a public company.

    I think there is some hope. Don't know about pressuring others, but retaining people and decent compensation and benefits should be a focus.

    We'll see. I really think this is headed to very high end destination resorts. Not people maximizing ski days on Epic Passes. It may work exceptionally well for VR. Do not see KSL, and Aspen headed that way.

    Might be totally off base, but I'm not totally shooting in the dark on this one.
     
  18. ARL67

    ARL67 Putting on skis Skier

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    I view Blue Mountain in Collingwood Ontario as a ski island serving "solely" the greater Toronto area. Being surrounded by the Great Lakes, a 2 hour drive radius captures probably 6-7 million. I can't recall the last time I rode the lift with an American / USA visitor. Blue is also a big summer destination. FYI vertical is only 700' but excellent lift system with only high-speed 6-chairs, and excellent snowmaking.

    Contrast that with Tremblant where I rode the lift with many USA visitors from all over the East coast states.
    They are attracted to a great mountain with plenty of runs, 2100' vertical, unique French culture, and cheap costs considering the 30-35% currency advantage. Lift system there needs improving IMO.

    I don't see Blue being an advantage in a portfolio to bundle a ski pass, it being highly Toronto centric. But it may be profitable on its own to keep as it services a very large market and is the only game in town.

    With Tremblant being a quality destination and attracting lots of USA skiers, I can readily see its value in a portfolio and pass-bundle program with other Eastern USA resorts.
     
    Last edited: Apr 13, 2017
  19. Lorenzzo

    Lorenzzo Snow Skier Skier

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    But Powder Magazine (blog/print) says it's to take on Vail. :huh:
     
    Last edited: Apr 13, 2017
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  20. Muleski

    Muleski Out on the slopes Industry Insider

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    Taking on Vail is "good copy", without question. There is so much stuff out there already, less than a week into this, that seems a bit conflicting. On the one hand, you have people in the business discussing Aspen's role as operations and advisory. We also see press releases and interviews that make it sound to me like much more. And we don't know if it will vary by property.

    Heck, we don't know what their portfolio of properties will look like on a year or so. My guess is that they will shed some of these, and acquire others.

    Obviously there are a number of people who are out there in the press suggesting that KSL is going to take on Vail. There are snippets out there suggesting a variety of pass options a year from now.

    We'll see. My hunch is that they are not going to follow Vail. The buzz that they are building this juggernaut is exciting,though.

    People that I know invested in this deal are not anticipating taking on Vail at Vail's game. I can't get into details. My hunch is that they are going to sell, acquire more serious flagship resorts, and that the ultimate portfolio will have a high end brand and look to it.

    I don't think that Eric Resnick is thinking that they lost out by not buying Wilmot, or that Snowshoe is some great feeder. Perhaps they sell Blue?

    It is so early, many more areas will be changing hands, whether it's involving KSL, VR, Boyne, Powdr......I think we just stay tuned. I great deal of effort and money is going into this. It's not that simple.

    I'm also picking up that there may be no one "model", it may vary based on the property and opportunity. Pretty interesting stuff.
     
    Last edited: Apr 13, 2017

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