Here we fucking go again.
The company that has turned Squaw out like one of Liam Neeson’s movie daughters is doubling down on pretending the Earth isn’t melting fast and will try mightily to piss off locals, lay of and sell before the sixth extinction by fake building a bunch of shit on land that shit shouldn’t be built on.
Monday, Aspen Skiing Co and private equity firm KSL Capital Partners finally consummated their relationship announcing they’ll pick up Intrawest Resorts Holdings Inc (SNOW.N) for about $1.5 billion, including the company’s current $500 million tab at the T Bar at Steamboat. That’s an industry-estimated 40 percent more than the combined resorts’ current valuation.
Intrawest was founded in 1976 and were the frontrunners in the “skealestate” (<– dunno how to spell it. Don’t really matter, it’s not a word) movement. In its day as a privately funded real estate development company, Intrawest owned Mammoth, Whistler Blackcomb, Copper Mountain, Les Arcs (France), Flaine Montsoleil (France), Panorama (BC), and the Village at Squaw Valley.
But, similar to Quiznos, they extended too far out in the early ‘00s and never really recovered.
Intrawest went on to become a Downhill Slide cautionary tale and the leading edge of an economy on the verge of collapse — and in 2006 were bought up by Fortress Investment Group. Fortress was a private equity and liquid hedge funds hot shot investment company/crumbler of dreams. They were underwritten by Goldman Sachs and Lehman Brothers (remember them? Those fuckers) to become the first publicly traded PE firm in the day (they’re currently trading under $8/share.)
The company’s hedge fund side pretty much sunk the business and in February, Japanese telecommunications giant SoftBank turned into Captain Save A Hoe and bought them up for a cool $3.3 billion including Intrawest and its big debt obligations.
To try to raise capital to save Intrawest, Fortress took it public in 2013 but that effort to pump up the brand was anemic and last year they started laying off on a bigly scale and sold off a couple coveted properties, Club Intrawest and Diamond Resorts International.
Fortress/Intrawest still owns Blue Mountain (Ontario) Snowshoe Mountain (West Virginia …not a typo. Skiing Trumps Coal), Steamboat, Winter Park, Mont Tremblant (Quebec) Canadian Mountain Holidays (Alberta) and Andy and Red’s resort in Zihuatanejo, Mexico.
The acquisition Monday will de-list Intrawest from the the Toronto Stock Exchange and NYSE.
In spite of a drunken hookup last fall between KSL and Aspen when the pair partnered with East West Partners of Avon on the acquisition of Snowmass Base Village property, it’s interesting that ski town hottie Aspen is willing to commit to this relationship with the aging localbro at the end of the bar with the receding hairline, the depleted trust fund and the known STD history. The Crown family owns a quartet of adjacent mountains and were pretty safe in their lane. And for residents there, they thought #TrumpCation was the worst it was going to get in ’17. Nope. Those who work for them must pissed about partnering up with KSL which is basically a Devner-based mountain town chop shop.
Though early reports state that the Crown family will keep its Aspen holdings separate from a new entity, KSL and Intrawest will combine. Cue opportunity for big box brand-marketing firm to create abstract ski-outdoor themed web 2.0 clusterfuck-but-friendly sounding name. My money is on: flaq, sum.mt or turx.
Perennial bad-guy financiers are in this too. Goldman’s back in the mix but this time on the Aspen/KSL side. Deutsche Bank Securities Inc, (aka the last bank that will lend to Trump/his largest debtor and the center of his conflict-of-interest regime) is handling the Intrawest side. Both are vultures and will hold the note waiting to pounce during the next downturn.
On an end user level, the industry is rushing to compete with Vail’s EpicPass in which skiers for $859 can get all-access to 15 resorts including Park City, Vail, Heavenly, Kirkwood, Beaver Creek and Breckenridge. It’s the aspirational loss leader business model personified. Guy making $178k/year living in the Mission or on the Upper East Side decides he wants to chuck it all and his dry cleaning bills, clicks through, gets his pass in the mail and ends up making one four-day trip to the Rockies/Wasatch/Sierra over a Presidents’ Day weekend, waits in line a bunch and gets a couple hangover turns before adjourning to High West Distillery talking loudly to nobody in particular about his business plan to launch a dating app that ranks based on portfolio strength combined with outdoor interest.
Right now, it seems that the addition of the Intrawest properties, Aspen and Squaw would lead to some kind of consolidation of the M.A.X. Pass (five days each at one of 44 resorts including the Intrawest properties), the Mountain Collective Pass (two days each at 16 resorts including Aspen and Telluride) and the Rocky Mountain Super Pass Plus (unlimited access to Winter Park, Copper Mountain and Eldora plus six days at Steamboat.) The Squawpine Gold, Silver, Bronze pass would presumably be folded in as well. All told, this model is the ski industry’s version of timeshare weekends. Get butts in the seats and up-sell. In this case the big prize for the owner-operators is selling off real estate which is blasted into the sides of mountains like the new Apex Park City because, fuck actual nature.
On a front office level, this move also looks like it could be a potential exit strategy for embattled Squaw CEO Andy Wirth. Even from their rarified perch, I’m assuming the higher ups at KSL by now have at least caught wind of the continued local chagrin and dismay about the fact that Wirth’s played his hand in the Basin and still can’t get through an email without “air-quoting” himself. My guess is he could get a transfer back to Colo. (where he wants to be anyway) to spend Aspen’s cash like Lloyd and Harry …all under the guise of a promotion.
For Wirth, this is one of those classic failing up scenarios that feckless CEOs site on their TED-X PowerPoints. Pause. Take a sip of water. “How I did it by not doing shit!”