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American Skiing to Purchase 2 Resorts

Lodging: The deal for $288 million would allow the big Eastern concern to expand into the West.

August 02, 1997|From Reuters

The "Beast of the East" is moving West.

American Skiing Co. on Friday agreed to buy two Western ski resorts for $288 million in a deal that would make it the biggest ski resort operator in the United States.

American Skiing agreed to buy Steamboat Ski Resort in Steamboat Springs, Colo., and Heavenly Ski Resort in Lake Tahoe on the California-Nevada border from Kamori International Corp., a closely held company that also owns hotels in Japan and has assets at a French ski resort.

"This is a big day for us," ASC Chairman Les Otten said. "These are resorts that are highly respected among skiers and snowboarders because both deliver an outstanding experience."

The deal, the latest in a wave of consolidation in the North American ski industry, will give ASC a major presence in the West and make it slightly larger than rivals Vail Resorts Inc. of Colorado and Vancouver, Canada-based Intrawest Corp.

"Those are big acquisitions," said analyst Kevin Eldridge at Salman Partners, a research firm in Vancouver. "Those two mountains give them a real step up in terms of critical mass. I would consider [ASC] on par with Vail and Intrawest now."

The deal raised speculation that ASC might go public with a stock offering to raise funds and better compete with its rivals.

Otten said in an interview that it is inappropriate to discuss financing for the deal at this time.

ASC was active in the industry's consolidation, but until this year, all its resorts were based in the Northeast. ASC dominated the Eastern market with its Killington resort in Vermont, marketed as the "Beast of the East," its flagship Sunday River resort in Maine and six other ski areas. But ASC wanted a world-class resort in the West to raise its profile.

During the previous ski season, the Steamboat and Heavenly resorts had an estimated 1.75 million skier days, an industry measure accounting for one skier skiing all or part of a day.

The two additional resorts, combined with its nine other resorts, give ASC a total of about 4.9 million skier days for the previous season, spokesman Skip King said.

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