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A skier rides up the new Crystal Ridge Express chairlift on Blackcomb Mountain in Whistler in this file photo. (John Lehmann/The Globe and Mail)
A skier rides up the new Crystal Ridge Express chairlift on Blackcomb Mountain in Whistler in this file photo. (John Lehmann/The Globe and Mail)

Vail Resorts' purchase of Whistler Blackcomb aims to boost makeover Add to ...

Vail Resorts Inc.’s $1.4-billion deal to buy Whistler Blackcomb Holdings Inc. is being touted as a friendly American takeover that will bolster the B.C. mountain resort’s ambitious expansion plans while raising the global profile of both companies.

Whistler Blackcomb, the host venue for skiing events at the 2010 Winter Olympic Games, is striving to become a year-round destination to diversify away from its reliance on the ski and snowboard season.

Global warming forces Whistler Blackcomb to move beyond skiing: analyst (BNN Video)

The operator of the sprawling resort on Whistler Mountain and Blackcomb Mountain said the takeover deal supports its $345-million redevelopment plans to build new facilities and accommodations that are designed to protect against the vagaries of winter weather and climate change. In the winter of 2014-15, the Whistler Blackcomb operation experienced an extremely low snowfall, which limited skier visits and hurt financial results.

Whistler Blackcomb represents Colorado-based Vail’s first foray north of the border.

Related: How Whistler transformed itself in to a top skiing draw

The ski operators have common attributes, notably attracting tourists from Australia and Britain, but they also have other strengths that differ. Vail’s U.S. facilities are luring customers from Latin America while the Canadian venue is popular with visitors from Asia. The combined resort entity will be a powerhouse in tourism marketing because of the expertise at each company in targeting foreign markets, said Rob Katz, Vail’s chairman and chief executive officer.

“We really see it as a very complementary kind of fitting together of all the pieces that would make for a pretty strong global effort around the world,” Mr. Katz said in an interview on Monday. “This is really about building on each other’s strengths.”

Vail operates in seven states, including Colorado, California, and Wisconsin. The company bought Perisher Ski Resort in Australia last year, gaining a foothold in that country through its largest mountain resort.

Whistler Blackcomb CEO Dave Brownlie is slated to become chief operating officer at the B.C. resort after the deal closes this fall.

Whistler Blackcomb’s share price surged 46 per cent to a record-high close of $36.63 on Monday on the Toronto Stock Exchange. The U.S. firm is offering $17.50 a share in cash and 0.0975 shares of Vail.

“It wasn’t on my radar until Vail approached us,” Mr. Brownlie said.

“As this deal started coming together, we engaged with Vail. I’ve known them and watched them and admired them for many, many years. They have financial resources that they bring to the table – a very strong company.”

The B.C. resort, which celebrated its 50th anniversary earlier this year, is now pursuing approvals for a major update that it calls Renaissance, including a new activity centre and a large indoor water park. It also proposes a slate of 55 to 65 townhomes that have ski access, a luxury boutique hotel and improvements to chairlifts and facilities.

Vail will be new to developing partnerships with First Nations communities – an important part of the Whistler Blackcomb business since the B.C. resort operates on traditional lands of the Squamish and Lil’wat.

Whistler Blackcomb is continuing to hold talks with the B.C. government, First Nations and the resort municipality of Whistler in an effort to renew master development agreements needed to move ahead with the Renaissance project.

Over the past five years, Vail has spent more than $500-million (U.S.) on improvements to its existing resorts and properties across its portfolio.

Mr. Brownlie said Vail’s sophisticated marketing and wide network of customers are key aspects of the deal because of the potential to bring new consumers to British Columbia, including increasing promotions to entice U.S. residents.

By joining forces, the combined entity expects to get a lift in total revenue. “It will make us stronger and we think we can add a bunch of value to Vail as well,” he said.

The two firms offer season passes at a discount to those who purchase months in advance in a strategy to reward frequent visitors, but make no apologies for charging premium prices to consumers who need lift tickets on the same day that they go skiing or snowboarding.

“The earlier you buy, the more value you get. If you show up at the ticket window and look to buy a ticket, it’s like walking up to an airline desk and looking for a flight out that day,” Mr. Brownlie said.

Both boards of directors at Whistler Blackcomb and Vail have approved the takeover offer. About 25 per cent of Whistler Blackcomb shareholders have agreed to support the cash-and-stock transaction, including the largest shareholder KSL Capital Partners LLC, a travel and leisure private equity firm.

Whistler Blackcomb shareholders are expected to wind up with 10 per cent of Vail shares after the transaction closes.

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