Vail Resorts Inc., which owns its namesake ski destination along with Keystone, Breckenridge and Beaver Creek in Colorado, said it bought Park City Mountain Resort in Utah from Powdr Corp. for $182.5 million in cash.
The acquisition includes land approved for about 687,000 square feet (63,800 square meters) of residential and commercial development, Broomfield, Colorado-based Vail Resorts said in a statement today. The purchase also ends a legal dispute between Vail Resorts and Powdr, allowing Park City to operate normally this coming ski season, the buyer said.
“This has been a difficult period for everyone involved,” Vail Resorts Chief Executive Officer Rob Katz said in the statement. Park City “is one of the most spectacular mountain resorts and iconic brands in the ski industry and I am proud to have the resort become a part of Vail Resorts.”
A snowfall shortage in the western U.S. last ski season led to a 50 percent drop in attendance in some areas, leading analysts including Smedes Rose of Evercore Partners Inc. to predict consolidation in the industry. Katz said in a January interview that his company is “always looking” for acquisition opportunities.
Vail Resorts surged 8.6 percent to $83.40 as of 12:48 p.m. in New York. The stock rose as much as 8.8 percent, the most since March 2013, to a record $83.50.
Park City Mountain Resort said on Sept. 9 that it would pay a court-ordered $17.5 million bond amount to Vail Resorts to ensure the Utah resort will open for the season as planned, on Nov. 22, 2014. With the acquisition, all aspects of the litigation “have been settled and this dispute will no longer pose any future threat to disrupt the operation of the resort,” Vail Resorts said in today’s statement.
The company said it expects $35 million in incremental earnings before interest, taxes, depreciation and amortization in the 2015 fiscal year, excluding any transaction and transition costs, as a result of the purchase.
The acquisition doesn’t include the Gorgoza Park inner-tubing business, about 10 miles (16 kilometers) from the resort, which will be retained by Powdr Corp.
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