Intrawest Corporation announces sale of Mammoth Mountain Ski Area
October 04 2005 - 11:35PM
PR Newswire (US)
Listed: NYSE TSX Symbols: IDR (NYSE) ITW (TSX) VANCOUVER, Oct. 4
/PRNewswire-FirstCall/ -- Intrawest Corporation announced today
that an entity controlled by Starwood Capital Group Global, L.L.C.
has signed an agreement to acquire a majority interest in Mammoth
Mountain Ski Area (Mammoth Mountain). The selling price of the
resort is based on a $365-million enterprise value with customary
adjustments for debt assumed, working capital and transaction
costs. Intrawest and Rusty Gregory, Mammoth Mountain's chairman and
chief executive officer, will retain minority interests.
Intrawest's retained interest is anticipated to be approximately 15
per cent. The operations of the resort will remain unchanged with
Rusty Gregory continuing as chairman and chief executive officer
and with Intrawest providing management expertise and other
corporate resources under a management services agreement. In
February 2005 the shareholders of Mammoth Mountain, including Dave
McCoy, Mammoth's founder and controlling shareholder, Rusty Gregory
and Intrawest agreed to engage Houlihan Lokey Howard & Zukin to
explore strategic alternatives to enhance the value of the
company's shares, including the possible sale of shares. Prior to
the transaction, Intrawest owned a 59.5 per cent interest in
Mammoth Mountain. "We joined forces with Dave McCoy and Rusty
Gregory in 1995 and since that time considerable value has been
created at Mammoth. It is clearly in Intrawest's best interest to
monetize a portion of this value now," said Joe Houssian, chairman,
president and chief executive officer of Intrawest Corporation. "We
believe Mammoth Mountain represents one of the great growth
opportunities in the year-round resort business in North America
and therefore we will retain an equity interest in the resort and a
50 per cent interest in Mammoth Hospitality Management, our lodging
company at Mammoth. Dave McCoy took Mammoth from a dream in the
early 1940s to one of the premier ski resorts in North America
today, and we look forward to working together with Rusty and
Starwood to grow this wonderful resort to its full potential." The
proposed transaction from the sale of Mammoth Mountain will result
in a pre-tax profit to Intrawest of approximately $101 million.
Pre-tax net proceeds to Intrawest after estimated debt assumed,
working capital adjustments, transaction costs and reinvestment in
Mammoth Mountain are approximately $166 million, including a
pre-transaction dividend. Although the initial use of proceeds will
be to pay down debt, Intrawest is evaluating all of its options for
the best use of proceeds. The transaction is expected to close
within 90 days and is subject to customary closing conditions.
Consequently there are no assurances that all of the closing
conditions will be satisfied or that the transaction will be
completed. In addition to the Mammoth Mountain transaction,
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. This transaction includes future development of over 1,000
residential units and 30,000 square feet of commercial space
scheduled for build-out over the next five to seven years. The
preliminary agreement is subject to Starwood completing its due
diligence on the real estate joint venture in the next 45 days.
Mammoth Mountain Ski Area is the leading four-season mountain
resort company in California, owning Mammoth Mountain, June
Mountain, Tamarack Lodge, Mammoth Mountain Inn and Resort, Mammoth
Snowmobile Adventures and Mammoth Mountain Bike Park. The company
also operates Sierra Star Golf Club in Mammoth Lakes, California.
Mammoth Hospitality Management is a 50/50 joint venture between
Mammoth Mountain and Intrawest that currently manages over 380
units in the Village at Mammoth and will be the manager for future
units developed on Intrawest's land at Mammoth. Intrawest
Corporation (IDR:NYSE; ITW:TSX) is a world leader in destination
resorts and adventure travel. The company has interests in 10
resorts at North America's most popular mountain destinations,
including Whistler Blackcomb, a host venue for the 2010 Winter
Olympic and Paralympic Games. Intrawest owns Canadian Mountain
Holidays, the largest heli-skiing operation in the world, and an
interest in Abercrombie & Kent, the world leader in luxury
adventure travel. The Intrawest network also includes Sandestin
Golf and Beach Resort in Florida and Club Intrawest- a private
resort club with nine locations throughout North America. Intrawest
develops real estate at its resorts and at other locations across
North America and in Europe. Intrawest is headquartered in
Vancouver, British Columbia. For more information, visit
http://www.intrawest.com/. Starwood Capital Group Global, L.L.C.,
which is headquartered in Greenwich, Connecticut with offices (or
affiliate offices) in San Francisco, Washington, D.C., Atlanta,
London, Luxembourg and Tokyo, has been an innovative leader in real
estate investments since its inception in 1991. Its investors
include some of the largest state and corporate pension funds,
endowments and high-net worth families from around the world.
Currently, Starwood Capital manages a real estate portfolio valued
at over $10 billion. In the past fifteen years, Starwood Capital
has closed or advised on real estate transactions totaling in
excess of $30 billion and has acquired equity interests in hotels,
golf and leisure-related properties, residential land, multifamily
and condominium units, senior housing, office, retail and
industrial space. Starwood Capital and its affiliates have
successfully executed an investment strategy that includes building
business enterprises around core real estate portfolios, including;
the recapitalization, reorganization and expansion in 1995 of a
real estate investment trust to become the company that is today
known as Starwood Hotels; the acquisition in 2003, in partnership
with affiliates of Goldman Sachs & Co., of National Golf
Properties/American Golf Corporation, the largest owner/operators
of golf courses and related facilities in the U.S.; and
contributing assets to create the company which is today known as
iStar Financial (NYSE:SFI), one of the leading publicly traded
finance companies specializing in commercial real estate mortgage,
mezzanine and net lease financing with a current market
capitalization in excess of $4.5 billion. For more information
regarding Starwood Capital, see http://www.starwoodcapital.com/. A
conference call is scheduled for Wednesday, October 5, 2005 at
7:30am PT (10:30am ET) to discuss this transaction. To access the
call dial 877-691-0877 before the scheduled start time. A playback
version of the conference call will be available until October 12,
2005 at 877-519-4471 with password 6563614. The call will also be
webcast live on http://www.intrawest.com/. Statements contained in
this release that are not historical facts are forward-looking
statements that involve risks and uncertainties. Intrawest's actual
results could differ materially from those expressed or implied by
such forward-looking statements. Factors that could cause or
contribute to such differences include, but are not limited to,
Intrawest's ability to implement its business strategies,
seasonality, weather conditions, competition, general economic
conditions, currency fluctuations and other risks detailed in the
company's filings with the Canadian securities regulatory
authorities and the U.S. Securities and Exchange Commission. In
addition, the completion of the transactions contemplated by this
release are conditional upon a number of factors, many of which are
outside of Intrawest's control. There is no assurance that the
transactions will be completed at all or upon the same terms and
conditions described above. For additional information, please
contact Mr. John Currie, chief financial officer, at (604) 669-9777
or Mr. Tim McNulty, director, investor relations at (604) 623-6620
or at If you would like to receive future news releases by email,
please contact: DATASOURCE: Intrawest Corporation CONTACT: Mr. John
Currie, chief financial officer, at (604) 669-9777 or Mr. Tim
McNulty, director, investor relations at (604) 623-6620 or at
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