KSL Capital Partners (KSL), a leading investor in travel and leisure businesses, today announced the final closing of a single-asset continuation vehicle for Alterra Mountain Company (Alterra), with total commitments of over $3 billion, including the commitments of the General Partner and rollover investors.
The transaction underscores KSL’s commitment to Alterra, while allowing KSL to return capital to limited partners. Investors in the continuation vehicle include a diverse group of state and county pension funds, corporate pension funds, sovereign wealth funds, endowments, foundations and insurance companies.
Established through a joint venture with an affiliate of Henry Crown & Company, Alterra was formed in July 2017 with the combination of Intrawest Resorts, Mammoth Resorts, Palisades Tahoe and Deer Valley Resort. In 2018, Alterra created its industry-changing Ikon Pass, which today provides skiers and riders access to over 50 mountain destinations with unique terrain around the world.
“Since its formation, Alterra has grown to become an industry-leading global owner and operator of mountain destinations and brands beloved by visitors around the world. We are thrilled to reaffirm our long-term commitment to the business, and we are very grateful to our investors for supporting us in the formation of this new vehicle,” said Eric Resnick, CEO of KSL. “This transaction allowed us to provide a significant return of capital to those existing investors who desired liquidity while welcoming a new set of investors who share our excitement about the future of Alterra. We look forward to continuing to work with Alterra in its next stage of growth.”
Jared Smith, CEO of Alterra said: “What we believe makes Alterra special is that we endeavor to respect and accentuate the elements that make each of our mountain destinations unique. Our passion for the places where we operate is only exceeded by the passion of our team members and our guests. We are extremely fortunate to have partners who share this passion and who recognize that their interests and the interests of our communities, team members, and guests are inextricably linked. We thank the entire KSL team for their continued partnership and are confident that, together, we will continue to innovate and elevate while remaining good stewards of these incredible places we get to call home.”
So what does this mean for skiing? The industry is speculating on what could be behind the move.
First off, most believe that a significant portion of that $3 billion (or more, the press release headline suggested the total figure was greater than $3 billion) is available cash that Alterra can invest as it wishes.
Much of the immediate speculation centers on capital investments. Alterra is involved in a major expansion project at Deer Valley, Utah, and recently completed large projects at destination resorts Steamboat and Winter Park, Colo. The cash infusion could make these investments easier to swallow and reduce Alterra’s debt.
The juiciest speculation concerns possible acquisitions. The most-mentioned targets include the usual multi-area suspects, from POWDR to Sun Valley/Snowbasin. As one source said, “there are not many big targets out there.”
What most everyone agrees on is that the continuation vehicle gives Alterra tremendous flexibility to do whatever it wants. It could invest in existing properties and also make acquisitions. “My instincts are Alterra sees opportunity both in their existing resorts and additional acquisitions,” another source said.
Beyond that, we’ll just have to wait and see.
Ski the World!