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Intrawest, WB part ways

Private equity fund KSL buys Intrawest's remaining stake in Whistler Blackcomb Holdings
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White gold KSL Capital Partners acquired 24 per cent of the public shares in Whistler Blackcomb Holdings Inc. on Monday after Intrawest, the resort's former parent company, sold off its remaining stake. Photo BY Logan Swayze

It's the end of an era, but the future is bright for Whistler Blackcomb.

On Monday it was announced that Denver-based KSL Capital Partners had acquired Intrawest's 24 per cent stake in Whistler Blackcomb Holdings Inc. — some 9,092,500 common shares at a market value of $12.75 per share, for a total pricetag just shy of $116 million.

Other than a few changes to the board of the corporation, it's business as usual for Whistler Blackcomb Holdings. The key benefit of the deal is that all senior management and decision making for the resort will now be concentrated entirely in Whistler.

Dave Brownlie, the current president and chief operating officer for Whistler Blackcomb, was promoted to president and chief executive officer and added as a director on the board. He will replace Bill Jensen, the former CEO who was based in Colorado with Intrawest and resigned from Whistler Blackcomb Holdings as a result of the sale of shares.

"I am very excited about the opportunity and I am looking forward to my new role as CEO of Whistler Blackcomb Holdings Inc.," said Brownlie on Tuesday. "As a result of this announcement, our entire management team will now be based here in Whistler.

"This transaction will have no effect on the daily operations of Whistler Blackcomb and our focus will continue to be on creating a world-class product for our guests. KSL has assembled a portfolio of premier travel and leisure assets and their investment in Whistler Blackcomb is a testament to the quality of our business."

The new title doesn't change Brownlie's day-to-day involvement in the resort all that much, as he was always involved in making big-picture decisions for the mountains and has been involved in investor relations as well. He has been with the company for 24 years, starting with Blackcomb Mountain.

Intrawest, which was acquired by Fortress Investment Group in 2006, is no longer invested in the resort it helped to establish, first by acquiring Blackcomb Mountain in 1986 and then by merging with Whistler Mountain Ski Corporation in 1996 to unite the mountains as a single resort — now the largest in North America with a combined 3,307 hectares of skiable terrain.

As well as Jensen, directors Wes Edens and Jonathan Ashley from Fortress Investment Group also resigned from the board.

Eric Resnick, the co-founder and managing director of KSL, and KSL partner Peter McDermott will join the board to fill in for Edens and Ashley. Flora Ferraro, the vice-president of finance for Whistler Blackcomb was also promoted as the interim chief financial officer.

Resnick released this statement after the acquisition of shares:

"KSL is delighted to be acquiring a 24 per cent interest in a world-class ski area," he stated. "Whistler Blackcomb is the largest and most visited ski resort in North America and we feel that it complements our portfolio of premier travel and leisure properties. Peter I are looking forward to working with the board to grow the business. Whistler Blackcomb has a very experienced and successful management team and we are enthusiastic to work with them as they continue to deliver a fantastic mountain experience for Whistler Blackcomb's guests."

In a release, KSL said they made the acquisition of shares for "investment purposes," but did not rule out buying or selling more shares in the future.

One long-standing member of the Whistler community welcomed the transaction at Tuesday's council meeting. Councillor Roger McCarthy served with Resnick for over a year while he was overseeing resorts in Colorado.

"I think it's the community of Whistler and the company that came out the big winners on this (share sale)," said McCarthy. "These are quality, classy guys. If you look at the resorts they own, the hotels they own, in terms of service levels they are at the higher end of the bracket. Quality, service and price."

McCarthy was also glad to see Brownlie promoted, as well as to see senior management based in Whistler where they are in touch with the community. In that vein, he said Resnick is no stranger to Whistler, etiher.

"His kids are at summer camp here, and he's actually been here quite often," said McCarthy.

As for the timing of the purchase, McCarthy said it could be taken as a huge vote of confidence in the resort. "Absolutely it is," he said.

Whistler Blackcomb ceased being an Intrawest resort around the time the company went public as Whistler Blackcomb Holdings in the initial public offering in late 2010, but the resort chain continued to own a stake in the now publicly traded company.

Intrawest, which relocated offices to Colorado at the end of 2011 after 34 years in Vancouver, is currently refinancing, and had never planned to be a long-term investor in the publicly traded company.

The only involvement that Fortress and Intrawest will continue to have with Whistler Blackcomb Holdings relates to a transition services agreement that will expire in 2015 after the companies have completely split shared business systems and services.

Whistler Blackcomb Holdings Inc. owns a 75 per cent stake in Whistler Mountain Resort Limited Partnership and Blackcomb Skiing Enterprises Limited Partnership, and all 75 per cent is publicly traded on the Toronto Stock Exchange — including the shares purchased by KSL. Nippon Cable in Japan, a long-time investor in the resort, owns the other 25 per cent.

Whistler Blackcomb will release its annual financial report on Wednesday, Dec. 12.

KSL's investment comes at a good time. Whistler Blackcomb had a successful 2011-2012 season as one of the only resorts with good snow in all of North America. That trend has continued this season as the resort continues to be hammered by storms — 164 centimetres falling in the seven-day period between Nov. 27 and Dec. 4.

Meanwhile, resorts in eastern North America are struggling to start this season and resorts in Ontario have not opened yet. Resorts in California, Colorado and California are getting more snow than last year, but some of the top resorts offer half the snow base of Whistler.

Europe is off to a slow start as well, with only one resort in France reporting a 100cm base as of Dec. 4.

With some help from the snow, Whistler is tracking well ahead of last year for the two-week Christmas period, up over 14 per cent for the period starting Dec. 23 and ending Jan. 2.