Crotched sale announced

[MichaelJ]

The sale of Crotched Mountain from Peak Resorts to Entertainment Properties Trust for $8 million was publicly announced today.

Jon Weis, spokesman for Entertainment Properties, said St. Louis, Mo.- based Peak Resorts would become a tenant, retaining control over the mountain's day-to-day operations. "It's not going to change its name; it's not going to change what it does," he said.

See boston.com for the full article.

 

[thetrailboss]

Hmmm....seems to be one of those sale-lease back deals. No big news really. Company was probably short on cash or wanted a write-off. You'd be surprised how many banks/investment companies/etc. do this all the time....with things like subways and public infrastructure! ("We'll buy your property for X, give you the money all up front, and you lease it back from us.")

 

[hammer]

It's most likely a good thing that a lot of the infrastructure improvements were already made...I wonder what this means for any expansion plans (new trails to the real summit, etc.)

 

[Angus]

I skiied there Sunday (there was lots of snow and few people) and I asked about the expansion plans that we've previously discussed here. they told me that it was going ahead as planned in the off-season but that the lift expansion and/or new trails might not be available next season - alot of work from last off-season is evident already. I also asked about them about making their visitor budgets, etc. they were very positive about the season, etc.

let me float another idea, hard winter - are there any other areas now in finanical difficulty that peaks might want to purchase. If they sold for $8mm put in $3mm in new infrastructure, sustained say $0.5-1.0mm in operating losses over 3 years - say they bought the place originally for $1-2mm - they still made $$$ and are maybe just trying to clean up their bal. sheet for new acquisition????

As previously stated, I've been very impressed by the operation - with the disclosure that I know nothing about the ski business. I was thinking Sunday about people's criticism of the spartan/warehouse like base lodge - I call it "fiscally prudent"!!!

 

[ctenidae]

Sounds like balance-sheet cleaning to me, too, Angus.

Most likely they're using the cash to pay off debts, and are holding the lease as an operating lease, so it shows up as a much smaller liability. Often a good deal, though if anything happens to Entertainment Properties, Peak could lose their lease, unless they have a clever clause in there, which is entirely possible.

 

[NYDrew]

8 million for a ski resort!!!!!

Everyone sing the lotto song now...if I had a million dollars....