JULY 2008: THE STATE WE'RE IN

{safe_alt_text} FLIR wins record-setting defense contract


WILSONVILLE-BASED FLIR Systems in late May inked the largest single defense contract in Oregon’s history — a $358.4 million deal with the U.S. Army for optical and infrared sensors.

To put that dollar figure in perspective, the total amount of defense spending in the state in 2006 barely topped $560 million. This new contract is an extension of an existing agreement with the Army, says Craig Stoehr, FLIR’s director of corporate development. The work will be performed in the company’s Portland facility.

Oregon is anything but a defense-contract powerhouse. In 2006 (the latest year numbers are available) it dropped from 40th to 43rd place — its lowest ranking in 10 years — when compared to federal spending in other states. That’s not to say there’s been no growth — contract dollars have increased 28% since the start of the Iraq War — it just hasn’t matched increases around the nation.

Stoehr says FLIR has been able to buck the trend by approaching military contracts with a commercial business model. The most important element of that approach is that the company funds its own research and development so that it can repurpose designs and products for other markets or defense contracts. For instance, the technology purchased by the Army in this latest contract is the same that FLIR sells to law enforcement.

In 2005, about 20 defense companies formed the Pacific Northwest Defense Coalition, of which FLIR is a member. Since then it’s grown to 110 members. Executive director Brice Barrett says other companies in the region are also learning to diversify their base as a way to grow contracts. FLIR, however, is probably unique.

“I would say this [contract] is indicative of a strong effort by FLIR to grow,” he says. “I’m not sure that it’s a sign of a trend, but it does show a company that’s getting sharper by the day.”                           ABRAHAM HYATT


MERGERS AND ACQUISITIONS
PRICE EXP. CLOSE BUYER / PARENT (HQ) SELLER / PARENT (HQ) ANNOUNCED
$69M Q2 ‘08 International Forest Products (BC) mills (BC, SD)/ Pope and Talbot (Portland) 5/2
$63M Q2’08 Blount International (Portland) Carlton Holdings (WI) 5/2
$37.5M   Q2’08 Waytronx (CA) CUI (Tualatin) 5/19
$8.5M Q2’08 Hydro International (ME) Eutek Systems (Portland) 5/9
ND Q2’08 The Cadmus Group (MA) Quantec (Portland) 5/2
ND Q2’08 LTC Global (Medford) Insurance Producers Alliance of America; Insurance Producers Alliance (FL) 5/5
ND Q2’08 Mentor Graphics (Wilsonville) Ponte Solutions (CA) 5/15
ND Q2’08 Strands (Corvallis) NetworthIQ (Portland) 5/15
ND Q2’08 Pacific Truck Center/ Pacific Power Products Co. (WA) truck dealership (Coburg) 5/21


REAL ESTATE TRANSACTIONS
PRICE BUYER / PARENT (HQ) REAL ESTATE (LOCATION) / SELLER (HQ) ANNOUNCED
$24.25M   Birch Point/Prometheus Real Estate (CA) Birch Pointe Apartments (Beaverton)/ Bayridge Associates (WA) 5/23
$19.15M Metro-Real Properties IV (CA) Menlo Park Plaza (Portland)/ Kimco Realty (NY) 5/23
$4.77M Neil Sechan and Matthew Messner Bel Aire Court Apartments (Beaverton)/ investor group 5/5
$3.5M Alter (Portland) industrial property (Portland)/ Inland Acquisitions Co. 5/16
$3M Farouk Al-Hadi two industrial buildings (Sherwood)/ REG Investments 5/6
$1.48M Bank of America 5.1-acre (Portland)/ Catellus Land and Development 5/28
$1.1M Goodwill Industries of Columbia Willamette (Beaverton) retail building (Beaverton)/ Susan Covington Arkoff Living Trust 5/28
$1M DKG&S Equity retail building (Beaverton)/ Pauwels Properties 5/28


CAPITAL RAISING
PRICE (TYPE) COMPANY (HQ) / LEADERSHIP INVESTOR (HQ) ANNOUNCED
$358.4M (contract) FLIR Systems (Portland)/ Earl R. Lewis, president and CEO U.S. Army Space and Missile Defense Command (AL) 5/21
$140M (senior secured credit facility) Mentor Graphics (Wilsonville)/ Walden C. Rhines, chairman & CEO Bank of America Securities; KeyBank National Association 5/2
$24.5M (equity) Learning.com (Portland)/William J. Kelly, CEO Educomp Solutions (India) 5/20

List researched by Mark Druskoff

 Have an opinion? E-mail feedback@oregonbusiness.com
Current Issue | SEP 08

Around the State

Season fuels fire business
It was tragic but not surprising that the nine people who died in a helicopter crash in Northern California Aug. 5 were working for a company based in Oregon.

Walker attacks ethanol law
Just weeks before Eastern Oregon gas stations will be required to sell fuel blended with ethanol, one lawmaker is already reconsidering the state’s year-old renewable fuel mandate.

Buzzing with the latest jargon
For University of Oregon professor and Economist’s View blog founder Mark Thoma the term “stagflation” is old news.

Nurses remain recession-proof
While many employees throughout Oregon are losing their jobs or worried about keeping employed, nurses are proving to be immune to the sick economy.

Graphic: Timber harvest drops in most Oregon counties

View all Around the State >


Advertisement | Advertising

Biz Life

Tactics: Brian McMenamin of McMenamins
McMenamins is an Oregon-style empire — getting big but still working hard to be quaint.

Office policy: Keep politics in its place
As the nation enters the boxing ring of presidential campaigning this fall, it’s not unusual for the jabs of political convictions to enter the workplace, too.

Tuition programs are good investments
In the ups and downs of the economic cycle retaining skilled workers remains a constant concern for businesses.

Next: Labeling food with lasers
Admit it. Peeling those little stickers off fruits and veggies is annoying.

View all Biz Life >

Lists

Deal Watch: Portland video processor raises $5.5M

The top-paid CEOs in Oregon

View all Lists >

From The Editor

Lions, tigers, bear markets
It’s been a difficult spring and summer: The economy cyclone flattened the house; the yellow brick road expansion has run out of funds.

View all Editorials >

Feedback

Most readers have made business changes to address climate change

View all Feedback >