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Fortress brings buying power to Intrawest

KIMBERLY NICOLETTIHigh Country Business Review
Special to the DailyIntrawest has a new lure for skiers in the wake of its recent purchase of the Steamboat ski area, pictured here.
Steamboat/Larry Pierce | Steamboat Ski & Resort Corp.

SUMMIT COUNTY Intrawest has a new lure for skiers in the wake of its recent purchase of the Steamboat ski area.Intrawest plans to grow aggressively, and if not for the financial backing of Fortress, it might not be able to acquire mountain and beach resorts as quickly, said Ian Galbraith, Intrawest spokesman.In August, Intrawest agreed to a $2.8 billion takeover by Fortress Investment Group. After reviewing its options to increase the value of the company, Intrawest decided the best alternative was to be acquired, Galbraith said. Intrawest announced its intentions on Feb. 27, 2006, and the purchase went through Oct. 26. Intrawest investors received $35 per share from the buyout.On March 1, Intrawest announced that its affiliate had completed the acquisition of Steamboat Ski & Resort Corporation. On March 29, the company announced a new ski pass program, which lumps Copper Mountain, Steamboat and Winter Park into one pass. The Rocky Mountain Super Pass Plus offers six unrestricted days at Steamboat and unlimited skiing on the mountain after 12:30 p.m. every Friday. It also allows unlimited skiing at Copper and Winter Park, for $479. The Rocky Mountain Ultimate Pass, for $999, provides unlimited skiing at all three resorts. It also includes a free childs pass with every Ultimate Pass purchase.This acquisition increases our capacity to reach new customers and represents a significant step for Intrawest in our strategy to become the undisputed world leader in the development and management of experiential destination resorts, said Alex Wasilov, president and chief operations officer of Intrawest.Vail Resorts had no comment on how the pass might affect its pass sales.When Fortress acquired Intrawest, it allowed Intrawest to refocus on what were good at, Galbraith said. As a private entity, were not as responsive to the public market, so we can look at the business more closely and deliver the best to our customers and get the best assets out of our resorts, he said. Intrawest still decides which resorts to acquire. The company has interests in 11 resorts in North America, including Whistler Blackcomb, a host of the 2010 Olympics. Fortress has more access to capital and is willing to invest in Intrawests operations. Fortress reported more than $30 billion in assets under management as of Dec. 31.Fortress began in 1998 as an asset-based investment management firm. It raises, invests and manages private equity funds, hedge funds and publicly traded alternative investment vehicles.Its private equity business primarily invests in North America and Western Europe, with an emphasis on significant cash flow. It also manages long date value funds for the long term, believing they are undervalued assets with limited current cash flows.The companys hedge fund business includes two segments: hybrids, which invest in diversified investments in undervalued and distressed assets or funds similar to endowment portfolios of large universities; and liquid hedge funds, which invest globally in fixed-income, currency, equity and commodity markets to capitalize on imbalances in financial markets.The real estate portion of Fortress is called Castles, which is made up of two publicly traded companies: Newcastle Investment Corp. (NYSE: NCT) and Eurocastle Investment Limited (ENXT: ECT). Newcastle owns $8.1 billion in assets and manages a portfolio of more than 600 individual securities and loans. Its objective is to produce long-term, stable returns with a moderate risk. On Feb. 8, Fortress (FIG) announced an initial public offering at $18.50 per share. On March 30, the last day to invest and still earn a partial first quarter dividend of 12 cents per share, it closed at $28.68.


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