Gillian Tan is a Bloomberg Gadfly columnist covering deals and private equity. She previously was a reporter for the Wall Street Journal. She is a qualified chartered accountant.

"Skiing" and "downhill" go hand in hand. But the stocks of North America's two biggest ski resort operators are defying gravity. 

On Monday, Vail Resorts of Colorado agreed to buy Canada's Whistler Blackcomb for $1.05 billion. The deal enables investors in the latter's November 2010 initial public offering to more than triple their initial investment and definitively beat the performance of benchmarks like the S&P 500 and its Canadian counterpart, the S&P/TSX Composite Index, over the same period. 

Whistler Blackcomb's largest shareholder, the travel-and-leisure-focused private equity firm KSL Capital Partners, is also set to lock in a similarly lofty return. It snapped up a 24 percent stake in the company from a unit of Fortress Investment Group at a narrow 5.9 percent premium to its IPO price, and has already (unsurprisingly) pledged its support for the deal.

Winning Run
Whistler Blackcomb's earliest shareholders are set to more than triple their initial investment as part of Vail Resorts' agreement to acquire the company
Source: Bloomberg

Thanks to the transaction's stock component, Whistler Blackcomb's shareholders also stand to make future profits from what will be a collective ownership of around 10 percent of Vail's outstanding shares (which rose to a new record on news of the deal). 

No Avalanche in Sight
Vail Resorts shares climbed to a new record on Monday after posting their biggest intraday leap in more than a year
Source: Bloomberg

Vail's management described the purchase as the "most strategic opportunity we could create anywhere in the world," one that will allow it to expand visitor reach while reducing the impact of variable weather (if snowfall is minimal at one resort, the powder may be great at another). Synergies include a potential boost in the sales of its "Epic" and "Epic Local" season passes, which will add Whistler Blackcomb to the roster alongside its other resorts like Vail, Beaver Creek and Breckenridge. And it's not paying an arm and a leg either, at roughly 11.2 times Whistler Blackcomb's trailing earnings before interest, taxes, depreciation and amortization, which is a discount to its own valuation of roughly 13.6 times trailing Ebitda. 

Buying Growth
The acquisition of Whistler Blackcomb is Vail Resorts's biggest deal yet, and will help the company achieve more meaningful growth than its recent bite-size deals in Wisconsin, Australia and Utah.
Source: Bloomberg

Notably, Vail gave itself a pat on the back for striking the deal at a time of U.S. dollar strength against the Canadian dollar.  

Greenback Boogie
One U.S. dollar currently fetches around C$1.31, which is above its historical average, but below its recent peak
Source: Bloomberg

But the timing could have been better -- a deal would have been even cheaper if it was agreed upon back in January, when the U.S. dollar was at its highest level since 2003. Still, Vail can't be faulted for waiting to see how Whistler Blackcomb's second quarter -- its busiest of the year -- would fare (spoiler alert: it was a record). But hey, it's better now than never.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

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Gillian Tan in New York at

To contact the editor responsible for this story:
Beth Williams at