Canada’s Intrawest, a pillar in the ski-resort-development industry and host to next year’s Winter Olympics at Whistler, British Columbia, is selling Summit County’s Copper Mountain to Utah-based Powdr Corp.
The deal, announced Tuesday, is expected to close next month, pending approval by the U.S. Forest Service. Company officials said in a statement that the deal will have no impact on Copper operations this season, including its season passes and vacation reservations.
Officials from both privately held companies declined to offer specifics about the sale or answer many questions.
Powdr Corp. is based in Park City, Utah, where it has transformed the once-fledgling Park City Mountain Resort into a national player. It owns six other resorts: Killington and Pico in Vermont, Mount Bachelor in Oregon, Boreal and Soda Springs resorts in California and Las Vegas Ski and Snowboard Resort in Nevada.
Intrawest acquired Copper and Whistler from a Delaware investment group in 1996 for $192 million. The deal marked the beginning of the North American ski industry’s merger mania, which saw companies paying astronomical prices for ski hills.
The 1996 Copper deal also made Colorado a battleground for the industry’s biggest players, Vail Resorts and Intrawest. A season-pass pricing war erupted in 1997 as the two behemoths jockeyed for position. When Intrawest took over operations at Winter Park in 2002 and acquired Steamboat ski area in 2007, the pass pricing war escalated.
None of Powdr’s resorts sells season passes near Vail Resorts’ six-mountain, $599 Epic Pass, which includes five Colorado resorts and Heavenly at Lake Tahoe. That raises the question: Will a single-hill Powdr try to compete against a five-hill Goliath with season passes at 1970s prices?
“It’s going to be interesting to see how they approach the competitive battle,” Avon-based ski-industry adviser Jerry Jones said. “The package of Vail Resorts passes is almost too good to pass up. Powdr is about to find out this is a very, very difficult competition they have with Vail Resorts.”
New York-based Fortress Investment Group bought Intrawest Corp. for $2.8 billion in late 2006. In early 2007, Intrawest acquired Steamboat ski area for $239 million. And in late 2008, as the resort real-estate market crumbled, Fortress buttressed its majority stake in Intrawest with a final-hour injection of $100 million on the day the company was due to pay a $1.68 billion debt.
Cole Kimball, an analyst who covers the ski industry for Janco Partners, said Intrawest is “circling the wagons” as the company’s real-estate opportunities at Copper wane.
“They are shoring up their balance sheet,” Kimball said.
Industry analyst Will Marks, with JMP Securities, suspects the decision to sell Copper likely addressed Intrawest’s need to whittle down its debt.
“It may have to do with the desire to raise capital for Whist ler, or it may have to do with the need to satisfy lenders,” Marks said.
The going rate for ski-resort sales is typically nine to 10 times the resort’s annual operating income. Avon adviser Jones speculates that the sale price for Copper was “around $100-plus million.”
“That’s less than what they would have gotten two years ago,” Jones said. “I wouldn’t call it a distressed sale, but it would have been a higher price two years ago. Intrawest has financial cash-flow problems, and they needed the money.”
Jason Blevins: 303-954-1374 or jblevins@denverpost.com
Retail businesses suffer at Copper
When Intrawest bought Copper in 1996, company officials promised an immediate injection of $26 million for new lifts and other infrastructure. Over the next decade, the company promised to spend $340 million on a new base village.
Resort officials on Tuesday declined to comment on whether the company had reached that level of investment in the 13 years it has owned Copper.
The retail scene in Copper’s village has struggled, with restaurants and shops opening and closing with almost predictable regularity. Shop owners have bemoaned the lack of a sizable hotel that could support a variety of shops and eateries.
“There is almost too much retail and restaurants right now for the amount of people who can stay at the resort,” said Don McCoy, who owns two markets in Copper’s village. “I think (the acquisition by Powdr) will be a positive move.
“Copper needs some fresh blood and to actually finish some of the things that have been started.” Jason Blevins
Key points in Copper’s chronology
1971: Chuck Lewis, an owner of Eldora ski area in Boulder County, founds Copper Mountain. It opens for skiing in 1972.
1980: Oil businessmen Paul “Tony” Novelly and Sam Goldstein buy Copper Mountain.
1995: British Columbia-based Intrawest Corp. partners with Ralcorp Holdings to develop a $400 million village at Ralcorp’s Keystone ski area.
1996: Intrawest buys Canada’s Whistler ski area and Copper Mountain for $192 million.
2001: Intrawest joins with owners of Aspen Skiing Co. to develop a $400 million village at Snowmass ski area. Five years later, the companies sell the project to California developer WestPac Investments.
2002: Intrawest joins the city of Denver in operating and upgrading the city- owned Winter Park ski area.
2004: The Summit County Board of Commissioners kills a proposal by Intrawest to add 1,155 residential units and more than 150,000 square feet of commercial space to the ski area’s base. Concerns about density, parking and the size of proposed buildings in the village are cited.
2006: New York private-equity firm Fortress Investment Group acquires Intrawest for $2.8 billion, using mostly debt, at an interest rate of about 6.4 percent.
2007: Intrawest purchases Steamboat ski area for $239.1 million from American Skiing Co., making Intrawest owner or manager of 11 North American ski resorts.
2008: Fortress injects $100 million into Intrawest on the day the company is due to pay or refinance $1.68 billion in debt.
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