Vail Resorts strikes $1.4-billion deal to buy Canada’s Whistler Blackcomb
Winter resort giant Vail Resorts Inc. is set to buy Canadian ski company Whistler Blackcomb Holdings Inc. in a $1.39-billion deal.
The British Columbia-based business, which operates a resort and ski facilities on Whistler Mountain and Blackcomb Mountain, said the sale supports its plans to build new facilities and accommodations that protect against the vagaries of winter weather.
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Vail Resorts operates in seven states, including Colorado, California, and Wisconsin. The company also bought Perisher Ski Resort in Australia last year, gaining a foothold in the country through its largest mountain resort.
Dave Brownlie, Whistler Blackcomb’s chief executive officer, said that Vail has “a track record and ultimately a commitment to reinvest more in the resort.” That will be important to push forward Whistler Blackcomb’s planned $345-million redevelopment of the mountains with more activities that don’t depend on snow.
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In the winter of 2014 to 2015, Whistler experienced an extremely low snowfall, which limited skier visits and hurt financial results. “Whistler Blackcomb, with its unprecedented acreage of high alpine terrain and Glacier bowls, is well positioned, but by no means immune to [weather] challenges,” Mr. Brownlie said in a statement, adding that the company’s board had been monitoring that regional weather risks.
Whistler Blackcomb is currently pursuing approvals for a major update of the mountain that it calls the Renaissance, including a new activity centres and a large indoor park. It also proposes a slate of 55 to 65 townhomes that have ski access and a six-star luxury boutique hotel, as well as other improvements to chairlifts and facilities.
In the last five years, Vail Resorts has spent more than $500-million (U.S.) on improvements to its existing resorts and properties across its portfolio, according to the company’s website.
Mr. Brownlie said that Vail’s “very sophisticated marketing engine” and wide network of customers was also an important part of the deal, because it would bring new customers to B.C.
But Vail will be new to developing business partnerships with the First Nations communities, which is an important part of the Whistler Blackcomb business, since the resort operates on traditional lands of the Squamish and Lil’wat.
Whistler Blackcomb is engaged in “ongoing efforts to negotiate the renewal” of its master development agreements needed to move ahead with the Renaissance project, but the acquisition doesn’t hinge on approval from First Nations communities.
Both the boards of directors of Whistler Blackcomb and Vail have approved the deal. About 25 per cent of Whistler Blackcomb shareholders will also support the transaction, including the largest shareholder, travel and leisure private equity firm KSL Capital Partners LLC.