By Eric Smith
Summer is an odd time to discuss what’s happening at North American ski areas—especially with record high temps now sweeping the U.S.—but the escalating “arms race” between megaresort operators Vail Resorts Inc. and Alterra Mountain Co. was among the hottest M&A developments in June.
In a busy month for M&A activity across the outdoor and active lifestyle industries, Vail’s announcement on June 4 garnered the most attention. Vail acquired four ski areas—Okemo Mountain Resort in Vermont, Mount Sunapee Resort in New Hampshire, Crested Butte Mountain Resort in Colorado and Stevens Pass Resort in Washington—giving the company inroads to the Boston and Seattle markets and helping increase Epic Pass sales.
“In New England, where we are currently solely represented by Stowe Mountain Resort, the addition of Okemo’s family-oriented programs and Mount Sunapee’s unique location less than 90 minutes from Boston will create a regional hub that will greatly enhance the experience and variety of options for our guests,” Liz Biebl, director of brand communications, Vail, told SGB the week of the deals. “In the Pacific Northwest, with the addition of Stevens Pass, an easy drive from Seattle, we now have a fantastic complement to Whistler Blackcomb that gives pass holders access to both resorts.”
A few weeks later, on June 20, Alterra announced the purchase of Solitude Mountain Resort in Utah. While it didn’t have the same punch as Vail’s multiple mountain deal, it did help increase Alterra’s ski area total to 13 year-round mountain destinations throughout North America, including the world’s largest heli-skiing operation.
“We are especially excited to expand our reach within Utah and offer another ski and snowboard experience in a state known for its exceptional snow and mountain culture,” said Rusty Gregory, Alterra’s CEO, in a release.
Alterra capped the month by adding the Thredbo ski area in New South Wales, Australia, to the Ikon Pass, bringing the pass total to more than 64,000 acres at 27 mountain destinations across the globe.
What’s next for the ski resort arms race? With the ongoing fight for new markets and more pass sales, it should continue heating up alongside summer temperatures.
Here are some more details about those ski resort deals, as well as some other notable M&A activity from June:
Vail Resorts to Acquire Four Ski Resorts
The 411 – Vail Resorts Inc. agreed to acquire Triple Peaks LLC, the parent company of Okemo Mountain Resort in Vermont, Mount Sunapee Resort in New Hampshire and Crested Butte Mountain Resort in Colorado. In a separate transaction, Vail is acquiring Stevens Pass Resort in Washington. The company will purchase Triple Peaks LLC from the Mueller family for $82 million and Stevens Pass Resort from Ski Resort Holdings LLC for $67 million.
Reaction – “Given the acquisition announced this week, we think it is logical to expect [Vail Resorts] to realize an acceleration in pass sales into F4Q18. These resorts were previously limited access; now they are all-access, capturing a larger market.”
—Brett Andress, KeyBanc Capital Markets
What’s next? – The moves boosted Vail’s stock the day they were announced, which also preceded the release of a solid third-quarter earnings for the company. Vail Resorts said it plans to invest in the four new resorts, so look for new lifts and new and/or improved slopeside amenities in the coming years. Also, look for Vail to continue an acquisitive streak as the arms race with rival Alterra heats up.
Alterra Acquires Solitude Mountain Resort
The 411 – Alterra Mountain Co. entered into an agreement to purchase Solitude Mountain Resort in Utah, which would bring the company’s total to 13 year-round mountain destinations throughout North America, including the world’s largest heli-skiing operation. Terms of the deal were not disclosed.
Reaction – “Joining the impressive group of Alterra Mountain Co. destinations places Solitude Mountain Resort in a strong position to continue to grow and enhance the brand and culture that is Solitude. We are excited about the opportunities this transaction will create for our guests, our staff and for our community in Big Cottonwood Canyon.”
—Kim Mayhew, general manager, Solitude
What’s next? – Alterra is privately held, so there was no way to compare the move to Vail’s in terms of shareholder value, but this deal—and to a lesser extent, adding Threadbo to the Ikon Pass—is part of Alterra’s strategy to keep pace on the pass wars. Look for the company to add more Ikon Pass partners and pick up smaller resorts when the opportunities arise.
Winnebago Acquires Chris-Craft
The 411 – Winnebago Industries Inc. acquired Chris-Craft, the recreational boat builder, from Stellican Ltd., which has owned Chris-Craft since 2001. Terms of the transaction were not disclosed. Chris-Craft is expected to be immediately accretive to Winnebago’s Fiscal 2019 EPS. Stephen Heese will continue to lead the Chris-Craft business as president, and Winnebago expects to maintain Chris-Craft’s Sarasota, FL, headquarters.
Reaction – “We believe the marine market has significant runway for growth and significant overlap with the RV market in terms of customer demographics, lifestyle and ownership crossover. The marine industry is growing as well and increasingly attracting new boaters.”
—Michael Happe, CEO, Winnebago Industries
What’s next? – In answer to an analyst’s question about expansion in the boat area, Happe said the initial focus will be on helping Chris-Craft’s team focus on the company’s existing growth strategies, with the brand needing to address some short-term capacity constraints. An expansion into other categories for Chris-Craft or acquiring another boat brand may be an option in the future, but Happe called those moves a “secondary priority” as the near-term focus is on integration. Read much more about this deal in the recent SGB article, Why Did Winnebago Acquire Chris-Craft?
Varsity Brands to be Acquired by Bain Capital
The 411 – Varsity Brands, the parent of BSN Sports, Varsity Spirit and Herff Jones, announced the signing of a definitive agreement to be acquired by Bain Capital Private Equity, the private investment firm. Varsity Brands is being acquired from Charlesbank Capital Partners and funds managed and/or advised by Partners Group, which purchased the company in 2014.
Reaction – “This new partnership presents Varsity Brands with an exciting opportunity to continue to expand and improve our products and services while remaining steadfast to our commitment to improving student life and overall engagement. Bain Capital’s extensive consumer and technology experience and their commitment to our mission of empowering young people will help us accelerate our growth to a new level.”
—Adam Blumenfeld, CEO, Varsity Brands
What’s next? – According to Ryan Cotton, a managing director at Bain Capital Private Equity, whose investments have included Canada Goose, Toms Shoes, Blue Nile, BRP, Daymon Worldwide, Bright Horizons, Burlington Stores and Sundial Brands: “We are excited to partner with the company’s experienced, committed management team to amplify the company’s e-commerce operations and digital expansion, while accelerating its growth through complementary acquisitions and organic initiatives to become the go-to source for every school’s sport, spirit and achievement needs.”
Other Deals from Last Month
In case you missed it, here are other notable deals that occurred in June (click the headline to read the full story on each):
Authentic Brands Group Acquires Nine West
Brunswick To Acquire Power Products’ Global Marine & Mobile Business
BSN Sports Acquires Kelly’s Sports
Dassault Systèmes Acquires Majority Stake In Centric Software
Differential Brands Group to Acquire Majority Of North American Division Of Global Brands Group
Flip Flop Shops Acquired By Bearpaw Parent
Gracedbygrit Acquired By Hylete
Peloton Acquires Neurotic Media
Rogue Fitness Acquires OSO Barbell
Photo courtesy Solitude Mountain Resort
[author] [author_image timthumb=’on’]https://s.gravatar.com/avatar/dec6c8d990a5a173d9ae43e334e44145?s=80[/author_image] [author_info]Eric Smith is Senior Business Editor at SGB Media. Reach him at eric@sgbonline.com or 303-578-7008. Follow on Twitter or connect on LinkedIn.[/author_info] [/author]
