From The Mountain Town News (Allen Best):
“There was a certain inevitability to it,” said Michael Berry, president of the National Ski Areas Association. After all, he explained, Whistler Blackcomb is the busiest ski area in North America in terms of gross skier days and volume. It did 2 million skier visits last winter, while Vail Mountain and Breckenridge usually come in at about 1.6 million.
That made it an attractive acquisition for Vail. The Denver Post noted that the sale price represents more than 11 times the EBITDA (a measure of earnings) of Whistler Blackcomb, compared to the 8 to 9 times that is typical of ski area sales.
Press releases described the purchase as a “strategic combination” but the financial press dispensed with that sweet-talking formality. It’s a sale, which company officials said they expect to close in 75 days or less. It will benefit owners of Whistler Blackcomb handsomely. Bloomberg Gadfly said investors in the company’s initial public offering in November 2010 stand to triple their initial investment and “definitively beat the performance of benchmarks” like the S&P 500 and the Canadian counterpart, the S&P/TSX Composite Index, over the same period.
The biggest single winner in the sale is Denver-based KSL Capital Partners, a rival to Vail in the Truckee-Tahoe area of California. It has a 24 percent ownership of Whistler Blackcomb.
The cliamte change factor
Chief executives from both Vail Resorts and Whistler Blackcomb emphasized diversity in their conference calls with investors. Rob Katz, CEO of Vail, has long expressed interest in improving geographic diversity. Vail already has four major ski areas in Colorado, one in Utah, and three in California, plus smaller ski areas in the Midwest and one in Australia.
To an extent, this buffers Vail from droughts. It already had some diversity, as was apparent in the last several years. The company’s resorts in the Sierra Nevada struggled in the absence of snow for several years, but its resorts at Park City and along the I-70 corridor in Colorado did reasonably well.
Adding Whistler Blackcomb to the mix gives Vail Resorts even more geographic diversity – and a stronger buffer against bad weather.