Boyne USA Buys Sunday River, Sugarloaf

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Publish Date

06/06/2007

SAM Magazine-Park City, Utah, June 6, 2007-Boyne USA is purchasing Sunday River and Sugarloaf/USA, Me., from American Skiing Company (ASC) for $77 million in cash. Boyne will also assume $2 million in debt and other liabilities.

"We are excited to bring almost 60 years of resort experience to the New England market," Stephen Kircher, Boyne's president for eastern operations, said in a statement. "New England is a very special place for the sport of skiing, and we enter this market with great respect and appreciation for what has been accomplished and what it represents. With our capital partners, we are eager to build upon that rich history while introducing fresh and innovative ideas to the market. Sunday River and Sugarloaf are properties that have exciting futures. Our goal is to help make their futures even more promising."

Headquartered in Michigan, Boyne USA, Inc. is a privately held company that has interests in seven North American resort properties, including Big Sky Resort, Montana; Boyne Mountain, Boyne Highlands and Bay Harbor, Mich.; Brighton, Utah; Crystal Mountain, Wash., and Cypress Mountain, B.C.

"I am confident both resorts have an exceptionally bright future ahead of them," said ASC president and CEO B.J. Fair. "Boyne is an established operator and should bring a wealth of vision and resources to guide Sunday River and Sugarloaf/USA into their next stages of growth."

Les Otten, who turned Sunday River into an Eastern powerhouse and created ASC, was one of the other, unsuccessful bidders. He had resigned from the ASC board earlier this year, presumably so that he could bid on the two resorts. "As you might expect, I'm personally disappointed in the decision. We submitted a highly competitive bid, but American Skiing Company chose to sell the resorts to another group," he said in a prepared statement. "I wish the new owners well, and I sincerely hope that they'll make the quality of the ski experience their top priority."

The transaction is subject to customary closing conditions, including Hart-Scott-Rodino antitrust approval and ASC stockholder approval. The transaction is expected to close on or before July 31, 2007, at which date ASC is due to redeem $420 million in preferred stock held by its largest shareholder, Oak Hill.

ASC has been selling assets to meet debts and other financial obligations since December 2006. While the company has raised $421 million from the sale of Steamboat, Killington, Mt. Snow, Attitash, and Pico, much of that was used to pay off other indebtedness, and the company says it will not be able to meet its obligation to redeem the Oak Hill shares.

The sale leaves ASC with one remaining resort, The Canyons, which is tied up in litigation regarding ownership of the resort.

Comments

GOOD JOB/TOUGH JOB

Being \\"man enough\\" obviously has nothing to do with the sale of SR and SL. There are laws and regulations governing these types of sales as well as debtors and investors interests that must be protected by law. Normally you must sell to the highest bidder.
I think BJ did a good job under extremely difficult circumstances including a crushing short term debt deadline.
I too think Boyne and Peak will do a good job.

Congrats to Boyne

Congrats to Boyne. 2 very nice resorts that needed a infusion with new owners.

Now let\\'s see where the skier visits go now. To ASC resorts that were sold. All the resorts that ASC sold are very good resorts. Question is can they increase skier visits.

I believe Peek resorts is the big winner of all the ASC resorts sold. Mt. Snow i think will have the biggest increase in skier visit in the up coming season of all the resorts that were previous ASC.

Managing Partner

Keep in mind that Les is the one who created the enormous financial burden that placed ASC in the position it is in. In terms of B.J., say what you will, but he kept the sinking ship afloat. There weren\\'t too many options for B.J. given that ASC wasn\\'t even generating enough revenue to make the interest/debt payments. It was pretty easy for Les to create the debt, but then he flew the coup. Certainly, one could argue that B.J. should have increased sales, but how does one do that when he is unable to borrow any caiptal to develop real estate? Good riddins to Les and the mess he created.

yes there is more

I agree with Pete: there is more here. After being handed one of the greates opportunities in the industry BJ Fair still could not do what was needed, which was to increase revenue. He did suck out an hefty salary over the last few years and fire a lot of people. And now as the empire Les created crumbles at BJ's feet - he's not man enough to hand SR & SL back to the resorts original owner.

Attorney

Very Interesting, although I would have like to have seen Les Otten buy Sunday River back. While I am sure Boyne USA will do a good job (they do a great job at their other areas). Can't help but wonder if there is not more at play here.

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