Sponsored by Lane Powell

The sell-out state

| Print |  Email
Articles - Jan/Feb 2012
Thursday, January 19, 2012

By Linda Baker

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
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?”




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

Storyteller in Chief: Power Player

September 2015
Wednesday, August 19, 2015

In 1996, after a 17-year career in the destination marketing industry, where I gained national standing as the CEO of the Convention & Visitors Association of Lane County, I was recruited by the founders of a new professional basketball league for women. The American Basketball League (ABL) hoped to leverage the success of the 1996 USA women’s national team at the Atlanta Olympics — much like USA Soccer is now leveraging the U.S. Women’s National Team’s victory in the World Cup. The ABL wanted a team in Portland, and they wanted me to be its general manager.



September 2015
Wednesday, August 19, 2015

Ben Kaiser holds his ground.


More Than Meets the Eye

Guest Blog
Tuesday, September 22, 2015
Janet Yellen official Federal Reserve portrait-thumbBY JASON NORRIS | CFA

On September 17, the much anticipated Fed decision was delivered and the equity markets haven't liked it.


The 5 most/least expensive rental neighborhoods in Oregon

The Latest
Thursday, September 24, 2015
092515neighborhoodthumbBY JACOB PALMER | DIGITAL NEWS EDITOR

Oregon's population is booming, and so are rental costs.


5 questions for ImpactFlow CEO Tyler Foreman

The Latest
Thursday, August 13, 2015

Portland-based startup ImpactFlow recently announced a $5.7 million funding round. CEO and co-founder Tyler Foreman talks about matching businesses with nonprofits, his time at Intel and the changing face of philanthropy.


The God complex

Linda Baker
Wednesday, September 30, 2015
093015-zydellren-thumbBY LINDA BAKER | EDITOR

The media coverage about Pope Francis must have put me in a Biblical frame of mind. Because after touring the latest phase of the South Waterfront development, a mind boggling 1.5 million square feet of office and retail space that will spring up north of the aerial tram over the next few years, I couldn’t stop thinking about the massive project as a modern day creation story.


Mayoral musings

Linda Baker
Tuesday, September 15, 2015
091515-mayors-thumbBY LINDA BAKER

The 2016 presidential election is shaping up to be the year of the outsider, with Bernie Sanders and Donald Trump capturing leads in the polls and the headlines. In Portland, Wheeler vs. Hales is bucking the outlier trend.

Oregon Business magazinetitle-sponsored-links-02