Intrawest Resorts Holdings, Inc. commenced an initial public offering Tuesday that is expected to raise about $50 million for the operator of seven mountain resorts and $200 million for Fortress Investments, which acquired control of the company in 2006 and helped it survive the financial crisis of 2008-09.
Intrawest is offering 3,125,000 shares of its common stock, while an entity controlled by certain private equity funds managed by an affiliate of Fortress Investment Group LLC is offering an additional 12,500,000 shares. Fortress also expects to grant the underwriters an option to purchase up to an additional 2,343,750 shares of Intrawest's common stock. Should underwriters fully exercise their options, the IPO will reduce Fortress's ownership in Intrawest from 82 to 60.1 percent.
The initial public offering price is currently expected to be between $15.00 and $17.00 per share, meaning it could fetch up to $305.5 million for sellers. Intrawest has applied to list its common stock on the New York Stock Exchange under the symbol "SNOW."
Intrawest has no specific plans for the net proceeds other than to use it for working capital and other general corporate purposes, which may include potential investments in, and acquisitions of, ski and adventure travel businesses and assets. The company will not receive any proceeds from the sale of Fortress' common stock. Fortress spun off Intrawest's Whistler Blackcomb mountain resort in British Columbia in a separate IPO in 2010. Intrawest has since relocated its headquarters from Vancover, B.C. to Denver, CO.
"We believe that opportunistically acquiring additional mountain resorts that are proximate to our existing resorts will enable us to enhance product and operational synergies," the company states in its S1 registration filing with the Securities & Exchange Commission. "Additionally, we believe that acquiring resorts in geographies outside our current operating footprint and acquiring additional adventure travel businesses will enable us to expand into new markets and further mitigate our exposure to any single geographic region." Goldman, Sachs & Co., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities and BofA Merrill Lynch are acting as joint book-running managers and representatives of the underwriters in the offering. JMP Securities, KeyBanc Capital Markets and Stephens Inc. are acting as co-managers in the offering.
Intrawest generated revenues of $524.4 million in the fiscal year ended June 30, 2013, when it hosted more than six million visitors from all 50 states and more than 100 countries. Roughly two thirds of its revenues come from its seven four-season mountain resorts, which include Steamboat Ski & Resort and Winter Park Resort in Colorado, Mont Tremblant Resort in Quebec, Stratton Mountain Resort in Vermont, Snowshoe Mountain Resort in West Virginia and half of Blue Mountain Ski Resort in Pennsylvania. Those resorts generated retail and rental sales of $44.4 million, up 10.4 percent from the prior fiscal year. A skier shreds fresh powder at Steamboat on Jan. 13. (Photo taken by Larry Pierce, courtesy of Colorado Ski Country USA.) Intrawest earned 22 percent of its revenue in fiscal 2013 from its adventure travel business, which is anchored by Canadian Mountain Holidays, the leading heli-skiing adventure company in North America. The remaining 12.5 percent of its revenues came from its real estate business, which manages, markets and sells vacation club properties; manages condominium hotel properties; and sells and markets residential real estate.
