With regard to the ski resort sale, which is expected to close within 90 days, Intrawest will retain a 15% interest as well as the property management assignment. Intrawest expects the transaction will result in a pre-tax profit of $101 million.
"We (bought into the asset) in 1995 and since that time considerable value has been created at Mammoth," says Intrawest chief executive Joe Houssian. "It is clearly in Intrawest's best interest to monetize a portion of this value now."
Houssian says Intrawest is retaining an interest in the property—as well as a 50% interest in Mammoth Hospitality Management--because it believes the property represents "one of the great growth opportunities in the year-round resort business in North America."
The agreement comes seven months after Mammoth Mountain shareholders -- including Dave McCoy, Mammoth's founder and controlling shareholder, Rusty Gregory and Intrawest -- engaged 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% interest in Mammoth Mountain.
The would-be joint venture development in Mammoth Lakes includes 1,000 residential units and 30,000 sf of commercial space scheduled for build-out over the next five- to seven years. The preliminary agreement is expected to become binding in the next 45 days.
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