Jay Peak bombshell

[benski]

Wow, just wow. To put this in perspective, Vail bought Okemo, the Sunapee lease, AND Crested Butte for $82 million to Triple Peaks, and $155 million to the REIT land owners (total of $237 million for THREE resorts).

https://vtdigger.org/2018/06/04/vail-resorts-buys-okemo-82-million-deal/

Vail bought Stowe's mountain operations for $50 million.

Crested Butte and Sunnapee are located on government land. Crested butte only owns the base area. What this shows is the base area is worth a whole lot more than a ski area. Owning a ski area with a base could be a lot more valuable. Is Okemo ski area on Public land. 250 still sounds very high for Jay. That would be a 28 price to earnings ratio.

 

[drjeff]

Apparently last year their EBITA was about 10 million. Historically, unless some major over bidding buying war takes place, sale prices are often in the 8-10x EBITA range.

I doubt even a Vail vs Alterra bidding war could get to even half of that 250 million figure mentioned

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[thetrailboss]

Apparently last year their EBITA was about 10 million. Historically, unless some major over bidding buying war takes place, sale prices are often in the 8-10x EBITA range.

I doubt even a Vail vs Alterra bidding war could get to even half of that 250 million figure mentioned

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Perhaps the signal that the receiver meant to send was to the investors to set expectations and prepare them for losing a significant amount of their investment. Based upon what you said I’d have a hard time seeing it being worth more than $100 million considering the condition it is in with the dated ski infrastructure. They can call it what they want but it is primarily a ski area.


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[BenedictGomez]

last year their EBITA was about 10 million.

Let's put it this way.

Vail paid 15x EBITDA for Whistler/Blackcomb, which I would guess was one of the priciest acquisitions in ski industry history. That said, Whister/Blackcomb is one of the premier ski properties in all of North America, so although Vail "overpaid", they clearly wanted it.

Were Vail to overpay in the same valuation range of 15x earnings, that gets you about $150M, still $100M short of the $250M bogey. And Jay Peak aint no' Whistler/Blackcomb.

As I said before, that's not happening.

 

[drjeff]

Perhaps the signal that the receiver meant to send was to the investors to set expectations and prepare them for losing a significant amount of their investment. Based upon what you said I’d have a hard time seeing it being worth more than $100 million considering the condition it is in with the dated ski infrastructure. They can call it what they want but it is primarily a ski area.


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Not totally sure of the distinction of Jay being primarily a ski area.... I have a few non skier friends, who are BIG hockey families, and as long as they have a kid playing hockey between about age 8 and age 16 or 17, they're always going up to Jay at least twice a year, and often not in prime ski season, for hockey tournaments, and also rave about the waterpark. The ice rink + waterpark combo is a BIG year round draw for the resort as well.... If it was just the golf course, well, that's not a major draw. The ice rink + waterpark is a big draw given the passionate Northeast and Canadian hockey population

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[benski]

Let's put it this way.

Vail paid 15x EBITDA for Whistler/Blackcomb, which I would guess was one of the priciest acquisitions in ski industry history. That said, Whister/Blackcomb is one of the premier ski properties in all of North America, so although Vail "overpaid", they clearly wanted it.

Were Vail to overpay in the same valuation range of 15x earnings, that gets you about $150M, still $100M short of the $250M bogey. And Jay Peak aint no' Whistler/Blackcomb.

As I said before, that's not happening.

Well Q management was notable for being bad, aside from the fraud. Goldberg is better but if I remember correctly he is a lawyer who lives in Florida, so still probably not the best person to run your ski area. To someone who knows the industry well this might be an relatively easy ski area to make more profitable.

 

[mister moose]

This should be a sobering wake-up call to the people that excused Quiros and Stenger because things got built. This is a very high probability that there are going to be some real victims here.

Wake up call? There was never a chance all the investors were getting paid back. The hole in the ground ANC Bio was exhibit A of that.

Well Q management was notable for being bad, aside from the fraud. Goldberg is better but if I remember correctly he is a lawyer who lives in Florida, so still probably not the best person to run your ski area. To someone who knows the industry well this might be an relatively easy ski area to make more profitable.

Goldberg is settling creditor claims, suing brokerage firms, finishing the viable projects and providing a legal context to keep the lights on. Stenger and Wright are still there running the place. I'm expecting the market to base the purchase price primarily on recent performance with a close eye on infrastructure. The ice rink, golf course, and hockey rink just add to the complete earnings picture. It's about value. It has to be, because you don't have location.

If I was looking at running the place I'd be a little concerned about what I'm going to call the "Atlantic City Effect". If anyone builds a waterpark closer to NYC or Montreal, Jay will suffer. The Jay Cloud is the primary product up there.
​

 

[fbrissette]

Let's put it this way.

Vail paid 15x EBITDA for Whistler/Blackcomb, which I would guess was one of the priciest acquisitions in ski industry history. That said, Whister/Blackcomb is one of the premier ski properties in all of North America, so although Vail "overpaid", they clearly wanted it.

Were Vail to overpay in the same valuation range of 15x earnings, that gets you about $150M, still $100M short of the $250M bogey. And Jay Peak aint no' Whistler/Blackcomb.

As I said before, that's not happening.

The number that is being tossed around (including by Goldberg himself) is that they expect Jay Peak to go for around 80-100 millions. The remaining investors should therefore expect to get back 30 cents on the dollar.

 

[MG Skier]

I'll check and see if there is a For Sale sign on route 242 tomorrow.

 

[VTKilarney]

There are several indoor waterparks that are closer to New York. But you make a good point about Montreal. For some reason, the indoor waterpark phenomenon has not caught on in Quebec.

 

[cdskier]

There are several indoor waterparks that are closer to New York. But you make a good point about Montreal. For some reason, the indoor waterpark phenomenon has not caught on in Quebec.

Yup...and soon there will be one a mere 8 miles from NYC (if it finally opens).

 

[benski]

Yup...and soon there will be one a mere 8 miles from NYC (if it finally opens).

That place is never going to open. They have been saying that for as long as I can remember. Camelbacks is always advertising ski and indoor water park packages on TV in the winter.

 

[cdskier]

That place is never going to open. They have been saying that for as long as I can remember. Camelbacks is always advertising ski and indoor water park packages on TV in the winter.

Well they're now owned by the same company that owns the Mall of America. Construction restarted and significant progress has been made in the last year and they are now back on target to actually open this year. Whether it will be successful and stay open is an entirely different story though. I have my doubts about that part...

 

[mister moose]

There are several indoor waterparks that are closer to New York.

Sorry, I thought the implied "anyone" meaning any VT/NH significant ski resort was more apparent. Similar to mountain biking, alpine slides, zip lines and golf, if you're the only one offering it (As part of the ski resort) you have a real draw. Everybody has a golf course now. Nobody says, "Let's buy a Jay condo and become lifers because of the GOLF!

As long as Jay holds court on skiing, ice rink & waterparks, they will have a unique offering. Stratton builds a waterpark? Game changer in that respect. Jay is back to 355 inches and a tram.

 

[BenedictGomez]

The number that is being tossed around (including by Goldberg himself) is that they expect Jay Peak to go for around 80-100 millions. The remaining investors should therefore expect to get back 30 cents on the dollar.

That would be the likely range based on EBITDA, so it makes sense. And I'd speculate there's probably solid upside once you boot Stenger and co. and get an expert management team in place who'll be fat trimmers & margin assassins.

Nobody says, "Let's buy a Jay condo and become lifers because of the GOLF!

I've met 2 folks on the lifts the last few years who each own up there, and both told me they regret the purchase due to the taxes. When the first guy told me his tax bill I almost fell off the chair lift. He's been trying to sell it and was having a devil of a time trying to get rid of it.

The Jay Peak golf course is really nice though!

For some reason, the indoor waterpark phenomenon has not caught on in Quebec.

Weird, right? It's seems like the PERFECT market for this.

A large metro population in a region that experiences a long winter period, and which is surrounded by (relatively) cheap land. For example, once you cross the Richlieu River it's farmland galore only 30 minutes from Montreal.

I predict someone builds a water park up there in the next few years, it makes too much sense.

 

[mbedle]

Maybe I am doing the math wrong and obviously taking ballpark guesses at what money is left, but:

Phase 1 investors - paid in full (will not benefit from Jay or Burke sale)
Phase 6 investors - debt free, but tied to Burke (will not benefit from Jay sale)
Phase 7 investors - paid back (will not benefit from Jay or Burke sale)
Phase 2 though 5 investors - Will benefit from sale of Jay Peak

Raymond James Settlement = 15 million Phase 1 (pay off investors), 67 million Phase 7 (pay off investors), 20 million Phase 6 (finish courts and cottages), 5 million Phases 2 - 5 (pay off debt). Remaining escrow funds 30 Million
Citi Bank Settlement = 13.3 million (not sure what is left of this settlement, pretty sure it went to keeping Burke afloat and repairing tram)
Insurance Settlement = 1.9 million (not sure what is left)
Stenger and Quiros Penalties = 3.5 million
Quiros disgorgement properties/assets outside of Jay Peak and Burke = 15 million (really big guess)
Approximate total funds in escrow for Phase 2 - 5 investors = 50 million
Sale of Jay Peak = 100 million.
Number of Phase 2 - 5 investors = 529
Payback amount - $283,553 each.

The hard part I am having is figuring out how much Vail truly paid for the three Triple Peaks resorts. In effect, they paid 72 million for the three resorts (with no assets) and 155 million to the asset owner and lease holder. The difficult part is trying to figure out what part of the 155 million was for the physical assets (land, buildings, etc.) and what part was for paying off the leases. It's also hard to put a number of what value the 1,000's of acres that Jay Peak owns, including the west bowl area.

 

[thetrailboss]

Maybe I am doing the math wrong and obviously taking ballpark guesses at what money is left, but:

Phase 1 investors - paid in full (will not benefit from Jay or Burke sale)
Phase 6 investors - debt free, but tied to Burke (will not benefit from Jay sale)
Phase 7 investors - paid back (will not benefit from Jay or Burke sale)
Phase 2 though 5 investors - Will benefit from sale of Jay Peak

Raymond James Settlement = 15 million Phase 1 (pay off investors), 67 million Phase 7 (pay off investors), 20 million Phase 6 (finish courts and cottages), 5 million Phases 2 - 5 (pay off debt). Remaining escrow funds 30 Million
Citi Bank Settlement = 13.3 million (not sure what is left of this settlement, pretty sure it went to keeping Burke afloat and repairing tram)
Insurance Settlement = 1.9 million (not sure what is left)
Stenger and Quiros Penalties = 3.5 million
Quiros disgorgement properties/assets outside of Jay Peak and Burke = 15 million (really big guess)
Approximate total funds in escrow for Phase 2 - 5 investors = 50 million
Sale of Jay Peak = 100 million.
Number of Phase 2 - 5 investors = 529
Payback amount - $283,553 each.

The hard part I am having is figuring out how much Vail truly paid for the three Triple Peaks resorts. In effect, they paid 72 million for the three resorts (with no assets) and 155 million to the asset owner and lease holder. The difficult part is trying to figure out what part of the 155 million was for the physical assets (land, buildings, etc.) and what part was for paying off the leases. It's also hard to put a number of what value the 1,000's of acres that Jay Peak owns, including the west bowl area.

Vail paid $155 million to buy the land and infrastructure.


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[thetrailboss]

The BFP Article:

https://www.burlingtonfreepress.com...an-go-250-million-repay-investors/2528411002/

 

[KustyTheKlown]

this isn't thread worthy on its own, so this felt the most appropriate thread for this:

just received word on pretty good authority that the disco biscuits are playing jay peak this summer, either weekend of 7/27, 8/3, or 8/10.

government mule will be one of those 3 weekends as well.

this is probably relevant to ~5 of you. but i'm pretty stoked for a summer weekend in jay with my favorite band and a trip to hill farmstead.

anyone know if stateside hotel is free cancellation? would love to lock down all three weekends without committing $

 

[thetrailboss]

Bump.

The Feds have filed charges as to ONLY the AnCBio Project scam. They charged Stenger, Q, Bill Kelly, and a perviously unknown "silent" partner in South Korea who (surprise, surprise) is at large.

https://www.wcax.com/content/news/Charges-Coming-in-Kingdom-Con-510222141.html