American Skiing Co. sells Maine resorts to Boyne USA
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By Bruce Edwards Herald Staff - Published: June 6, 2007
And then there was one.
American Skiing Co., once the largest ski resort operator in the country, will sell its Sunday River and Sugarloaf/USA resorts in Maine to Boyne USA Resorts for $77 million. Boyne will also assume $2 million in debt.
Headquartered in Michigan, privately held Boyne USA operates 11 ski areas and golf courses in five states and Canada.
The sale is expected to be completed by the end of July. Once the deal closes, it will leave American Skiing Co. with one resort — The Canyons in Park City, Utah.
"The longstanding relationship between ASC and the communities of Sunday River and Sugarloaf/USA extends to the very origins of our company," ASC President and CEO B.J. Fair said in a statement. "With so much of our company's roots and history here, it will be hard to part ways with these resorts. However, I am confident both resorts have an exceptionally bright future ahead of them."
Stephen Kircher, president of Boyne's eastern operations, said Boyne has a 60-year track record of resort experience, making it the largest family-run resort company in North America.
"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," Kircher said.
Kircher, whose family owns the company, went on to say that Boyne (www.boyneusa.com) intends to introduce "fresh and innovative ideas to the market."
Tuesday's announcement is keeping with ASC's strategy of unloading its resorts to pay off its staggering debt, which at one time was in excess of $600 million, including preferred stock obligations.
This year alone, ASC sold its Killington/Pico and Mount Snow resorts in Vermont and its Attitash resort in New Hampshire. The company previously sold Steamboat in Colorado, Heavenly in California and Haystack in Vermont.
The proceeds from previous resort sales have allowed ASC to pay off its debt, ASC spokesman David Hirasawa said Tuesday. He said proceeds from the sale of Sunday River and Sugarloaf/USA will be used for working capital or for other purposes.
Hirasawa said the only significant financial obligations that remain is the approximately $420 million in preferred stock obligations.
He said there was significant interest in the two Maine resorts but declined to identify other potential buyers. It's been widely assumed that ASC founder Les Otten was interested in reacquiring Sunday River, which he purchased in 1979 from Killington, his former employer.
In a phone interview Tuesday, Otten confirmed he had made an offer for Sunday River and Sugarloaf.
"As you might expect, I'm personally disappointed at American Skiing Co.'s decision," said Otten, who resigned from the board of directors earlier this year. "I submitted a highly competitive bid but American Skiing Co. decided to sell it to another group."
Otten said he wished the new owners well and "trust(s) they'll do a great job in running the resorts."
As the head of ASC, Otten pursued an aggressive acquisition and real estate development strategy, assuming debt at high interest rates. It's that debt that proved to be Otten's and ASC's undoing.
But on Tuesday, Otten said as the largest common stockholder, he took a huge loss while the preferred stockholders, Oak Hill Capital Partners, made out nicely and that the resort properties have fetched premium prices.
Reminded that other common stockholders also lost everything they invested in ASC, Otten said that at the time of the stock offering there was a disclaimer that given the nature of the business it was a "high risk" investment. In fact, he said it turned out to be "a very high risk investment."
Otten, who recently sold his minority share in the Boston Red Sox, said he has no immediate plans except to run his real estate and golf simulator businesses.
Boyne USA Resorts owns or operates mountain and golf resorts throughout the United States and Canada including Boyne Mountain, Boyne Highlands, and The Inn at Bay Harbor – A Renaissance Golf Resort in Michigan, Big Sky Resort in Montana, Brighton in Utah, Crystal Mountain in Washington, Gatlinburg Sky Lift in Tennessee, and Cypress Mountain near Vancouver, British Columbia.
Contact Bruce Edwards at bruce.edwards@rutlandherald.com.
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