Mammoth Resorts deal adds to a run of mergers
Colorado partnership will buy the operator of ski areas including Snow Summit.
Mammoth Resorts, the company that runs four of California’s most popular ski resorts, has agreed to be acquired by a Colorado partnership, further consolidating control of the nation’s ski slopes into the hands of a few major developers.
The partnership of Colorado-based Aspen Skiing Co. and KSL Capital Partners, a private equity firm, is buying Mammoth Resorts, which operates Mammoth Mountain and June Mountain in the Eastern Sierra, and took over Bear Mountain and Snow Summit in the San Bernardino Mountains in 2014.
The terms of the deal, to be completed by fall, were not disclosed.
The partnership, which was formed this week, will operate 12 resorts that attract about 7 million skiers a year, with Mammoth Mountain as the biggest resort. The Mammoth Resorts properties in California draw about 2 million visitors a year to more than 4,000 skiable acres.
The deal creates a new challenger to Vail Resorts Inc., the publicly owned company that operates 10 resorts and three urban ski areas in the U.S. and Australia.
The KSL-Aspen Skiing partners vowed to keep focus at the California resorts on the ski experience.
“We are the furthest thing from a detached corporation,” said Mike Kaplan, chief executive of Aspen Skiing, which owns four resorts and hospitality projects in Colorado. “We are really passionate about the ski industry, the mountain environment and the mountain communities.”
Rusty Gregory, chief executive of Mammoth Resorts, said he expects the deal will keep the same local management in place at Mammoth.
“They bought Mammoth because of our personality, not to change our personality,” he said.
The Colorado partners also vowed to continue investing in the California resorts.
“We love to see our resorts continue to thrive and prosper,” Kaplan said.
Although a dollar amount for the Mammoth Resorts purchase was not disclosed, Connecticutbased Starwood Capital Group bought a controlling interest in Mammoth Resorts in 2006, when it operated only Mammoth and June Mountain, for $365 million. Mammoth Resorts took over Bear Mountain and Snow Summit in 2014 in a $38-million deal.
The purchase of Mammoth Resorts follows a consolidation spree in the ski industry that has put some of the nation’s most popular mountains in the control of a handful of large resort developers.
The trend has been evident around Lake Tahoe, where Vail Resorts, operator of Heavenly Mountain Resort, acquired the Northstar-at-Tahoe resort near the lake’s North Shore in 2010.
The following year, Squaw Valley USA and Alpine Meadows, two of the largest ski resorts at Lake Tahoe, combined operations.
Only two days before announcing the latest deal for Mammoth Resorts, KSL and Aspen Skiing unveiled a deal to take over Intrawest Resorts Holdings, a Denverbased resort company that operates six mountain resorts, with approximately 8,000 skiable acres and 1,100 acres of land for real estate development. The deal was valued at $1.5 billion.
The KSL-Aspen Skiing partnership seems intent on challenging the dominance of Vail Resorts, one of the world’s biggest ski resort operators. KSL’s two founder, Michael S. Shannon, and Eric C. Resnick, are both former Vail executives.
Vail, through its subsidiaries, operates 10 resorts and three urban ski areas in Colorado, Utah, California, Nevada, Minnesota, Michigan and Wisconsin as well as Australia.
The story of Mammoth Mountain — California’s busiest ski resort — began with Dave McCoy, who created the first rope tow in the Mammoth area in 1937 by lashing a rope to the axle of a Model A Ford and charged skiers 50 cents to get pulled up the slopes.
Local control of the resort has been on the decline since 1996 when Canadianbased resort operator Intrawest bought a major share in the resort, followed in 2006 by Starwood Capital Group, a private equity fund run by real estate developer Barry Sternlicht.
Mammoth residents seemed split on whether the latest change in ownership would be good for locals. Some business owners hope the new resort owners will invest heavily in the mountain.
“I’m very excited,” said Kevin Green, a real estate developer who has lived full time near the Mammoth resort for five years. “It’s great for real estate. It’s going to get more people to visit our mountain.”
But Green said his girlfriend worries that lift tickets, lodging, food and other necessities for locals will get more expensive.
“There has to be a balance where people can build a life for themselves here,” he said.