Intrawest Corporation has announced that an
entity controlled by Starwood Capital Group Global has completed the purchase of a majority interest in
Mammoth Mountain Ski Area, based on an enterprise value of
$365 million.The transaction has resulted in a pre-tax profit to Intrawest of
approximately $101 million. Pre-tax net proceeds to Intrawest after debt
assumed, working capital adjustments, transaction costs and reinvestment in
Mammoth Mountain amount to approximately $171 million. Initial use of the
proceeds will be to pay down debt while Intrawest evaluates its options for
the best use of the proceeds.
Intrawest has retained a 15 per cent interest in Mammoth Mountain and
will continue to provide management expertise and other corporate resources as
required. The operations of the resort will remain unchanged with Rusty
Gregory continuing as chairman and chief executive officer and maintaining
approximately a 12.5 per cent interest.
Intrawest and Starwood have entered into a
preliminary agreement for a joint venture on the development of the majority
of Intrawest’s separately owned real estate in the Town of Mammoth Lakes. With
the closing of the MMSA transaction and with Starwood completing the greater
part of its due diligence, Intrawest and Starwood will now turn to finalizing
the terms and conditions on the joint venture agreement which is expected to
be completed by the end of January 2006.