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Vail Buys Heavenly

post #1 of 7
Thread Starter 
Vail Resorts to Acquire Heavenly from ASC

Vail, CO (Tuesday, March 26, 2002) - The rumors previously reported here at First Tracks!! Online are true. Vail Resorts, Inc. announced that it has entered into a contract today to acquire Heavenly Ski Resort in the Lake Tahoe area of California and Nevada from American Skiing Company. The acquisition of Heavenly brings greater diversification to its winter resort business, which at the moment is located entirely within Colorado. The transaction is expected to close in 30-90 days for cash
consideration of $102 million (including approximately $3 million of assumed debt), less a cash adjustment at closing of as much as $6 million depending upon the exact closing date. Therefore, the total net consideration is expected to be between $96 and $99 million. Heavenly's current EBITDA in fiscal '02 ending July is expected to be between $14.5 and $16.0 million.

With an existing bed base in the South Lake Tahoe area of 20,000 and nearly 800 additional Marriott-branded fractional and quarter-share ownership keys scheduled to be completed by November 2002 in the heart of South Lake Tahoe, Heavenly offers opportunity for growth for Vail Resorts. In anticipation of this expanded bed base, Heavenly opened a new $25-million gondola into South Lake Tahoe within the past 12 months.

"Heavenly is considered to be among the top ski and snowboard resorts in the United States. It offers tremendous winter and summer growth opportunity with its proximity to major metropolitan areas and has the potential to become much more of a national destination resort. This transaction will enable Vail Resorts to significantly increase our presence in the North American ski and snowboard resort industry, as well as to geographically diversify our winter revenues.

Additionally, we are excited to be acquiring Heavenly at what we believe is an attractive price relative to its inherent and potential value," explained Adam M. Aron, chairman and chief executive officer of Vail Resorts.

Ranked in the top 10 most visited ski and snowboard resorts in North America and rated the 15th best overall resort in the 2002 SKI Magazine Reader Survey, Heavenly will become the fifth in Vail Resorts' portfolio of premier U.S. ski resorts -- all of which are counted among the 15 best resorts in the SKI Magazine survey. Vail Resorts owns and operates Vail, Beaver Creek, Breckenridge and Keystone, four of the most visited ski resorts in North America.

Heavenly operates 29 lifts, including six high-speed lifts and the new $25-million, eight-passenger gondola that runs year-round; a snowmaking system that covers 69 percent of its mountain trails; seven dining facilities; a terrain park and a half-pipe; and six year-round and nine seasonal retail/rental shops. A complimentary shuttle system and ample parking serve the resort's four separate base areas, two of which are located in California and two in Nevada. Heavenly has long been known for its staggeringly beautiful vistas and miles upon miles of cruising runs, steeps and bowls.

Over the next five years, Vail Resorts plans to invest approximately $25 million in on-mountain improvements, above an estimated $3 million per year in annual maintenance capital. Improvements will include upgrading existing facilities, building new on-mountain restaurant facilities, upgrading and replacing lifts and snowmaking systems and enhancing the resort's environmental efforts.

"Heavenly is the most visited ski and snowboard resort in the Lake Tahoe area. Given Vail Resorts' expertise in aggressively marketing and packaging our resorts and enhancing the guest experience through strategic capital investment, smart management and our commitment to quality, we believe we can grow Heavenly's skier visits in a relatively short period of time," said Andrew P. Daly, president of Vail Resorts.

Vail Resorts was advised in this transaction by Deutsche Banc Alex. Brown, which also issued a fairness opinion as to the consideration being paid.
post #2 of 7
I think this will definately lock in Vail as the company that has the most skier days per year, solidly beating out Interwest and ASC.
post #3 of 7
I hate to say it, but I don't think that anything one can buy in Vail is the least bit heavenly.

methinks the title should be,

Vail Buys Embarrassingly Wasteful

post #4 of 7
Thread Starter 
Anybody want to place bets as to which other properties ASC will be forced to sell to stay afloat?
post #5 of 7
I have heard some rumors that Park City Mountain Resort Has been eyeing the Canyons.If that were to happen then an Interconnect between Deer Valley, PCMR and the Canyons could become a reality.
post #6 of 7
Thread Starter 
Deer Valley and PCMR are right next to each other, but how many lifts would they have to build to connect Park City with The Canyons?
post #7 of 7
James, It would take only one maybe two lifts to do it.If you follow the ridge line The Canyons and Park City Mountain Resort are not that far apart.Of course this rumor comes up every few years so who Knows?
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