Starwood Capital Group Global, L.L.C. has completed the previously announced purchase of a majority interest in Mammoth Mountain Ski Area, based on an enterprise value of $365 million. The transaction has resulted in a pre-tax profit to Intrawest of approximately $101 million. Pre-tax net proceeds to Intrawest after debt assumed, working capital adjustments, transaction costs and reinvestment in Mammoth Mountain amount to approximately $171 million. Initial use of the proceeds will be to pay down debt while Intrawest evaluates its options for the best use of the proceeds.
Intrawest has retained a 15 per cent interest in Mammoth Mountain and will continue to provide management expertise and other corporate resources as required. The operations of the resort will remain unchanged with Rusty Gregory continuing as chairman and chief executive officer and maintaining approximately a 12.5 per cent interest.
Also previously announced, Intrawest and Starwood have entered into a preliminary agreement for a joint venture on the development of the majority of Intrawest's separately owned real estate in the Town of Mammoth Lakes. With the closing of the MMSA transaction and with Starwood completing the greater part of its due diligence, Intrawest and Starwood will now turn to finalizing the terms and conditions on the joint venture agreement which is expected to be completed by the end of January 2006.
