What Price "Stowe Mountain Resort"?

billski · May 14, 2009

Time to start the wagers!

What price will Stowe Mountain Resort ultimately sell for?

2007: Sunday River and Sugarloaf to Boyne: $77M
Kmart: $85M
Steamboat: $265M

Weigh in now!

skiadikt · May 14, 2009

surprised at how high some folks think this will go for. i know it's an elite resort but doesn't it do maybe half the skier days k-mart does?

GrilledSteezeSandwich · May 14, 2009

I'm guessing over 225 million due to the new hotel and golf course..

ComeBackMudPuddles · May 14, 2009

skiadikt said:
surprised at how high some folks think this will go for. i know it's an elite resort but doesn't it do maybe half the skier days k-mart does?

i think it's for the whole package, real estate included, and not just the ski area. therefore, i guessed $175-200 mn, thinking the economy will lower the purchase price a bit.

ski_resort_observer · May 14, 2009

Assuming it includes the Spruce developement this yahoo is going with $150m......Steamboat went for $265m in a good economy so that's what I'm using as my similar property sample. It could go for a firesale price too.

AIG has already invested 200m in a 400m developement plan....they are not going to give that away for free and even tho they have less than half the skier visits kmart has I assume their revenue per skier visit is much higher. Despite kmart raising their SP prices when the alleged evil invaders from Utah took over, they are still half of what Stowe gets for a SP. Day tik prices are higher. Kmart sold for 85m in a better economy, I think AIG is a motivated seller. Gonna be interesting.......

drjeff · May 14, 2009

ski_resort_observer said:
AIG has already invested 200m in a 400m developement plan....they are not going to give that away for free and even tho they have less than half the skier visits kmart has I assume their revenue per skier visit is much higher. Despite kmart raising their SP prices when the alleged evil invaders from Utah took over, they are still half of what Stowe gets for a SP. Day tik prices are higher. Kmart sold for 85m in a better economy, I think AIG is a motivated seller. Gonna be interesting.......

I'm guessing in the 50-75 million range. Undervalued, yup, but given the current economic climate and the fact that the folks in Washington will likely come back around to AIG shortly after they're done with the auto industry

firesale pricing is my guess.

GrilledSteezeSandwich · May 14, 2009

drjeff said:
I'm guessing in the 50-75 million range. Undervalued, yup, but given the current economic climate and the fact that the folks in Washington will likely come back around to AIG shortly after they're done with the auto industry firesale pricing is my guess.

I think the hotel in itself is worth about that much..you are dreaming..I'd buy the place for 75 million..I'm sure wealthy relatives would lend me the money..lol

RootDKJ · May 14, 2009

Who do we all think potential buyers would be?

POWRD/SP? They could piss off both the top and bottom half of VT
Smuggs? Location, location, location
Intrawest? Adds a 3rd Northeast area to their properties?
Sundown? I couldn't resist....:lol:

deadheadskier · May 14, 2009

If I had to guess; whatever the value is of the unsold real estate plus 75 million or so.

GrilledSteezeSandwich · May 14, 2009

I don't think Smuggs can afford it..

GrilledSteezeSandwich · May 14, 2009

did anybody mention the Meullers owners of Okemo and Crested Butte???

WWF-VT · May 14, 2009

A list of assets included in the proposed sale of Stowe Mountain Resort:

Stowe Mountain Operations
• Spruce Camp base lodge
• Rental equipment and demo centers
• Ski and snowboard school
• Children’s ski and snowboard programs
• Grooming and snowmaking
• Dining (10 restaurants and grills on and around the mountain)
• Cross country skiing activities
• Summer recreation activities including: Stowe Country Club (including one golf course), auto toll road, gondola sky ride, bungee trampolines, alpine slide, inflatable obstacle course, climbing wall
• Additional lodging that is not included in Spruce Peak Realty

Spruce Peak Realty
• Stowe Mountain Lodge (including remaining inventory of fractional and wholly owned condominiums)
• Spa at Stowe Mountain Lodge
• Remaining home sites
• All future expansion possibilities
• Stowe Mountain Club (includes a second golf course)

jerryg · May 14, 2009

WWF-VT said:
A list of assets included in the proposed sale of Stowe Mountain Resort:

Stowe Mountain Operations
• Spruce Camp base lodge
• Rental equipment and demo centers
• Ski and snowboard school
• Children’s ski and snowboard programs
• Grooming and snowmaking
• Dining (10 restaurants and grills on and around the mountain)
• Cross country skiing activities
• Summer recreation activities including: Stowe Country Club (including one golf course), auto toll road, gondola sky ride, bungee trampolines, alpine slide, inflatable obstacle course, climbing wall
• Additional lodging that is not included in Spruce Peak Realty

Spruce Peak Realty
• Stowe Mountain Lodge (including remaining inventory of fractional and wholly owned condominiums)
• Spa at Stowe Mountain Lodge
• Remaining home sites
• All future expansion possibilities
• Stowe Mountain Club (includes a second golf course)

Throw all this out the window because we're not in a market that will ever take such a list into account. The $200m is assumed debt on IIRC and therefore it either gets written off or assumed to the new owner.

Every reosrt sale in the east save Mt. Snow/Attitash was a steal in recent years. Kmart and Pico for $85m. SR and SL was like the deal of the century. These sales were two years ago in a time when we didn't even know we were in recession. $75-$80 should be the sale price in the climate and ONLY because of the shiney new stuff that's been built recently. Take away the new transfer gondi, new hotel/spa, new golf course, and new HSQ on Spruce and $50m would be a number I'd look at.

eastcoastpowderhound · May 14, 2009

jerryg said:
Throw all this out the window because we're not in a market that will ever take such a list into account. The $200m is assumed debt on IIRC and therefore it either gets written off or assumed to the new owner.

Every reosrt sale in the east save Mt. Snow/Attitash was a steal in recent years. Kmart and Pico for $85m. SR and SL was like the deal of the century. These sales were two years ago in a time when we didn't even know we were in recession. $75-$80 should be the sale price in the climate and ONLY because of the shiney new stuff that's been built recently. Take away the new transfer gondi, new hotel/spa, new golf course, and new HSQ on Spruce and $50m would be a number I'd look at.

Exactly why I said 51-75...the assumed liabilities. Rossignol sold to Quicksilver a little over 4 years ago for over 400 million...Quicksilver announced the sale of Rossi this year for around 150 million...actual selling price ended up being 78 million and assumption of debt. Forget about what AIG has invested in the place...if you had invested 10K in AIG two years ago, what would it be worth today? Same deal, just because they've invested 200 million doesn't mean that'll be the market rate in todays economy. I'd be astonished if it went for more than 100 million...and there will be no bank loans involved in the deal...it'll be private equity, a REIT (like CNL) or it won't happen.

GrilledSteezeSandwich · May 14, 2009

eastcoastpowderhound said:
Exactly why I said 51-75...the assumed liabilities. Rossignol sold to Quicksilver a little over 4 years ago for over 400 million...Quicksilver announced the sale of Rossi this year for around 150 million...actual selling price ended up being 78 million and assumption of debt. Forget about what AIG has invested in the place...if you had invested 10K in AIG two years ago, what would it be worth today? Same deal, just because they've invested 200 million doesn't mean that'll be the market rate in todays economy. I'd be astonished if it went for more than 100 million...and there will be no bank loans involved in the deal...it'll be private equity, a REIT (like CNL) or it won't happen.

So if Stowe mountain resort has $100 million in debt, and it sells for $100 million..with the new buyer taking on the debt..than it essentially sold for $200 million give or take future interest minus and plus depreciation of assets???? Any MBAs have some insight..

billski · May 14, 2009

GrilledSteezeSandwich said:
So if Stowe mountain resort has $100 million in debt, and it sells for $100 million..with the new buyer taking on the debt..than it essentially sold for $200 million give or take future interest minus and plus depreciation of assets???? Any MBAs have some insight..

Maybe. You're playing spinmeister now. There are many ways to cut a deal, include assets-only sale,.
Ostensibly the operation is run by MMC. Are you selling the operations too? Maybe a sale and leaseback by MMC?
I would also like to know who is controlling the sale/accepting the offer. US Govt playing in the sandbox?????
They will get many variations on these, but my offer is most attractive: I've got $13 in escrow for a cash-only sale to close 5/29

BushMogulMaster · May 14, 2009

I'm not going to take a gander here on a specific number, but I think it will surprise some of you how low the sale price will be.

The value of the business will be determined by the ebidta times an accepted multiplier. This won't be huge... Stowe can't be doing huge numbers in terms of skier visits, and I doubt that they've done any better (if not worse) from an NOI standpoint than any other resorts in the state.

Add to that real estate value, which may be substantial, but don't forget: whatever units are SOLD are no longer the property of Stowe Resort, and therefore are not included. The fact that over $200MM has been spent is 100% irrelevant. The value of the unsold units will be assessed, and included on some level in the pricing.

Then you have to factor in debt service, deferred maintenance, existing equipment assets, and a variety of other little pieces of the puzzle.

In the end, you'll see a number far lower than the perceived value.

I'll go out on this limb far enough to say that I don't expect more than 8 digits, probably not even within range of approaching 9.

Just for CYA purposes, I'll also add the following: I could be entirely wrong. :wink:

Highway Star · May 14, 2009

BushMogulMaster said:
The value of the business will be determined by the ebidta times an accepted multiplier.

Which is 6 to 8. On ski area operations.

I'm sure their operating profit is healthy as a horse. They have very low actual mountain ops cost compared to the ticket yield. Lots of money is going into customer service.

I would guess $50-100M for the "ski area" operation alone. Once you factor in all the other real estate and other businesses, it gets up there.

Keep in mind that Killington didn't actually sell for $85M. It was $85M plus $75M in land, pre real estate boom around 2000.

I would call it around $150-250M for the whole package, without factoring in for debt.

BushMogulMaster · May 14, 2009

Highway Star said:
Which is 6 to 8. On ski area operations.

I would guess $50-100M for the "ski area" operation alone. Once you factor in all the other real estate and other businesses, it gets up there.

6 seems most often used at the moment. I'd be pretty surprised if Stowe's ski operation is pulling an ebidta of more than $8MM to equate even to a $50MM value.

Their ticket yield is certainly higher than most, but their skier visit numbers don't seem that impressive.

JD · May 14, 2009

GrilledSteezeSandwich said:
I don't think Smuggs can afford it..

That would be the coolest though.

What Price "Stowe Mountain Resort"?

What price will Stowe Mountain Resort actually sell for?

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$25-50M

$51-75M

$76-100M

$101M-125M

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$201-225M

Over $225M

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