Vail’s shares soar after Park City buy announced

BROOMFIELD – Vail Resorts Inc. has acquired the Park City Mountain Resort in Utah from Powdr Corp. for $182.5 million in cash, the company announced Thursday. The deal will create the nation’s largest ski resort, covering more than 7,000 acres.

Vail will combine Park City with the nearby Canyons Resort, which it operates for Talisker Land Holdings LLC, based in Kamas, Utah. Talisker leases mountain land to the Park City resort.

The acquisition by Broomfield-based Vail Resorts (NYSE: MTN) includes all of the assets of Greater Park City Co., the land used for ski terrain at the resort held by Ian Cumming, and base-area lands owned by Powdr Development Corp., which have approved zoning for approximately 687,000 square feet of residential and commercial development.

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The acquisition does not include the Gorgoza tubing hill, located approximately 10 miles from the resort, which will be retained by Powdr Corp.

The deal also ends a legal battle between Vail and Powdr that had threatened to close the Park City resort this winter. According to the Salt Lake Tribune, Powdr Corp. on Tuesday posted a $17.5 million bond to operate the resort this season while it appealed a judge’s ruling that Talisker had a right to evict the resort for failing to renew its lease on time in 2011. The resort sued Talisker for $7 million in March 2012 after Talisker refused to extend its lease to 2051. The resort claimed it had been damaged by Talisker’s threat to close the resort, and Talisker countered that it had never made such a threat.

Vail Resorts also announced Thursday that, because of the acquisition, it expects $35 million in incremental earnings before interest, taxes, depreciation and amortization in fiscal year 2015, excluding any transaction and transition costs. The company said it anticipates additional contributions from the acquisition in future years, particularly after it can connect the experience of the two resorts. In the media statement, Vail Resorts said it expects the acquisition to provide significant tax benefits over the next 15 years, including an average of approximately $12 million in additional annual taxable depreciation and amortization expense through fiscal 2021.

News of the acquisition and end to the litigation sent the price of Vail Resorts’ shares to an all-time high of $83.31 on Thursday,

The Park City resort, opened in 1963 and located 34 miles east of Salt Lake City along Interstate 80, was named the fifth best resort in North America by readers of Ski Magazine in 2014. Its 16 lifts serve 114 runs, nine bowls, four terrain parks and two half pipes. In summer, the mountain offers one of the world’s longest alpine slides, a nearly 4,000-foot long alpine coaster, zip lines and more than 70 miles of hiking and biking trails. During the 2002 Winter Olympics, Park City hosted the snowboarding and men’s and women’s alpine giant slalom competitions.

Canyons, originally called Park City West and then Wolf Mountain, opened in 1968.

“Park City Mountain Resort is one of the most spectacular mountain resorts and iconic brands in the ski industry, and I am proud to have the resort become a part of Vail Resorts,” said Rob Katz, chairman and chief executive of Vail Resorts, in a media statement. “The acquisition will allow us to immediately bring Park City Mountain Resort onto the Epic Pass, which will now offer skiers from across the country and around the world access to 22 resorts, including Canyons in Park City, Utah; Vail, Beaver Creek, Breckenridge and Keystone in Colorado; and Heavenly, Northstar and Kirkwood in Tahoe.

“We look forward to working collaboratively with the entire Park City community, as well as city and county officials, as we chart the future for the resort, including how we can best bring the Canyons and Park City ski experiences together to create the largest mountain resort in the United States.”

Blaise Carrig, president of Vail Resorts, will act as interim chief operating officer for the resort.

The Epic Pass and Epic Local Pass will be valid at Park City this season, and all Park City passes for the 2014-2015 ski season will continue to be honored and can be exchanged or upgraded for a season pass that will also be valid at Canyons. The majority of all lift tickets sold at either resort will be valid at both Park City and Canyons.