Home Back Issues Jan/Feb 2012 The sell-out state

The sell-out state

| Print |  Email
Articles - Jan/Feb 2012
Thursday, January 19, 2012
Article Index
The sell-out state
Page 2
Page 3
Page 4
Page 5

By Linda Baker

0112_SelloutState_01
Above: Jim Johnson, president of Tripwire, says the company’s acquisition by Thoma Bravo will make the company bigger and better. “We have a growing successful headquarter company in Oregon and our new owners are financially driven — they are not trying to consolidate companies. They bought us because they thought we had an upside.”
// Photo by Matthew Ginn
Below: Portland-based Hanna Andersson was sold in 2008 to Boca Raton, Fla.-based Sun Capital.
// Photo by Alexandra Shyshkina
0112_SelloutState_02
Last fall, Oregonians witnessed an exodus of locally owned brands. Williams & Sonoma acquired lighting fixtures manufacturer Rejuvenation; Landry’s bought storied fish house McCormick & Schmick’s; and the Einstein Noah Restaurant Group snatched up Kettleman Bagel Co. Meanwhile Tazo Tea, which was acquired by Starbucks in 1999, decided to relocate to Kent, Wash., leaving about 30 locals with uncertain job prospects and a Southeast Portland warehouse district without an anchor tenant.

The Tazo move “was unfortunate,” says founder Steve Smith, who has since launched another tea enterprise, Steven Smith Teamaker, this one operating out of Northwest Portland. Battles over consolidating the Portland and Washington operations have gone on for years, Smith says. “When Tazo Portland turned into a manufacturing plant only, the soul started to slip away.”

Not all Oregon companies that have been acquired move out of state or are absorbed by the parent company. And the reasons businesses sell run the gamut: an intentional exit strategy, bankruptcy, succession challenges in family-owned businesses and more recently, a dismal IPO market. But if the spate of fall buyouts is noteworthy, it’s because it underscores Oregon’s primary role in the merger and acquisition marketplace as a kind of shopping center for large, out-of-state firms. “We’re an incubator,” says Smith. “There are lots of creative people here thinking about things in a unique way and creating small businesses that then have tremendous potential within a larger business at some point.”

There’s no shame in serving as the nation’s innovation mill. On the contrary, innovation has brought the state national and international acclaim. But as job and wage growth strategies in Oregon take center stage — and as other regions expand on our success — our place in the acquisition food chain, and the reasons for that placement, merit a closer look. Consider that in 2011, Oregon companies acquired or partially purchased 49 out-of-state companies in deals valued at about $1.7 billion, according to New York-based Dealogic. That figure doesn't include the value of deals with undisclosed terms. A single acquisition, Precision Castparts’ $900 million purchase of Bellevue-based Primus, accounted for more than half of the amount invested.

By contrast, there were 82 Oregon targeted acquisitions or partial purchases by out-of-state companies or private equity firms and investors in 2011 — a deal landscape valued at about $2.7 billion (not including undisclosed terms). Those acquisitions added to a string of buyouts or majority stake sales of Oregon companies, a list that includes Harry & David, U.S. Bank, Tektronix, Willamette Industries, YoCream, Hanna Andersson, Fred Meyer, Lucy Activewear and Stumptown Coffee.

“Oregon is building businesses that people want to buy,” says Carolyn Vogt, a Lane Powell attorney. “[But] why are we the target rather than the buyer?”

 



 

Comments   

 
Juvenal Goldstein
0 #1 DiasporaJuvenal Goldstein 2012-01-23 10:46:40
Oregon is a hostile business environment and Portland is a branch office town.
Quote | Report to administrator
 

More Articles

OB Poll: Wineries and groceries

News
Friday, October 24, 2014

24-winethumbA majority of respondents agreed: Local vineyards should remain Oregon-owned and quality is the most important factor when determining where to eat or buy groceries.


Read more...

The clean fuels opportunity

News
Monday, November 10, 2014
111014-dirtyfuel-thumbBY KIM MOORE | OB RESEARCH EDITOR

A market for low-carbon transportation fuels has a chance to flourish in Oregon if regulators adopt the second phase of the state’s Clean Fuels Program.


Read more...

Kill the Meeting

November/December 2014
Wednesday, October 22, 2014
BY AMY MILSHTEIN

Meetings get a bad rap. A few local companies make them count.


Read more...

Political Clout

November/December 2014
Wednesday, October 22, 2014
BY KIM MOORE

Businesses spend billions of dollars each year trying to influence political decision makers by piling money into campaigns.


Read more...

Measure 91: What Oregon Businesses Need to Know

Contributed Blogs
Wednesday, October 15, 2014
91 thumbBY DIANE BUISMAN

Some common misconceptions employers have about marijuana.


Read more...

Revenge Forestry

November/December 2014
Tuesday, October 14, 2014
BY JONATHAN FROCHTZWAJG

A flare-up in the Elliott Forest raises questions about détente in Oregon’s timber wars.


Read more...

Woman of Steel

November/December 2014
Wednesday, October 22, 2014
BY LINDA BAKER

Tamara Lundgren tackles the challenges—without getting trampled.


Read more...
Oregon Business magazinetitle-sponsored-links-02
SPONSORED LINKS