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|Articles - Jan/Feb 2012|
|Thursday, January 19, 2012|
Page 2 of 5
A small-business state, Oregon doesn’t have a lot of big companies to act as acquirers. But our acquisition dynamic is as much a cultural as economic phenomenon, some observers say. Today, new public and private sector initiatives are improving market conditions for keeping and growing companies and jobs in state. But if Oregon aims to move beyond its incubator status — and not everyone thinks we should — that may require overcoming yet another hurdle: a deep-seated ambivalence about thinking big.
“There is a culture in this community that’s torn about growth, size, scale, companies — about capitalism,” says Dave Chen, principal of Equilibrium Capital and former chair of the Oregon Innovation Council. Oregon isn’t lacking in innovation, Chen says. “We’re lacking in the desire to grow it. There is something in our culture that says, ‘Keep it small.’”
Jim Johnson, president and CEO of Tripwire, wasn’t thinking small when he sold the Portland security solutions software company to San Francisco-based private equity firm Thoma Bravo last June, a deal valued in the hundreds of millions of dollars. But he did do some soul searching about continuing to get big on his own, and getting big in Portland in particular. “I asked myself: ‘Jim, why the hell would I want to be owned by a private equity firm? Why didn’t I do this myself?”’
In fact, Tripwire was on a path to go public when a faltering market led the company to change plans. But Thoma Bravo did more than “present the better deal,” Johnson says. Portland isn’t Silicon Valley. “And if you’re not in the middle of that competitive crunch every day, it’s easy to lull yourself into thinking you’re a great company when you’re not,” he says. Thoma Bravo “brought in the business expertise that allows us to grow,” he adds, and also provided access to the firm’s handful of other software acquisitions — “sister companies that push each other to be best in class.” Tripwire, which is still headquartered in Portland, is on a path to gross $300 million in the next four to five years, Johnson says.
A world and a sector away, Terry Oftedal, director of supply chain operations for YoCream, describes similar reasons for selling the Portland-based frozen yogurt company, which was acquired last year by French company Danone, which has its U.S. headquarters in White Plains, N.Y. For years, the board of directors had sought a strategic partner to accelerate business, he says. “A lot of culture and capabilities are being brought to the table that we couldn’t have done on our own,” said Oftedal, citing as examples Danone’s “global reach” as well as project expansions, such as YoCream’s conversion to a much more powerful IT database. YoCream has about 100 employees in Oregon, and is “seeing substantial growth,” Oftedal says.
In 2001, after her husband fell ill, Hanna Andersson co-founder Gun Denhart sold the family-owned children’s clothing store to a private equity firm—the company has since been resold several times. The company employs 98 people in its Oregon headquarters.
Noting that one of the original buyers had managed Neiman Marcus and that Hanna Andersson is now a national brand, Denhart says: “We could not have done it ourselves. We did not have the skill set."
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When I say, “Your Employee is Always Right,” I do not mean “right about the facts,” but rather “right about how they feel” and “right about how they want to be led.”
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BY JASON NORRIS | OB GUEST BLOGGER
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Is your business ready to join us in the call for action? This opening panel includes Oregon businesses who will discuss why they signed the Oregon Climate Declaration, the investments they are making to reduce carbon emissions, and how their actions are affecting their companies.
Get ready for two days of special events produced with the EPA, Portland Timbers and ISOS before and after the GoGreen Conference on October 16.
First Call Resolution targets employee well-being and client satisfaction.
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Sussman Shank is proud to announce that eight attorneys have been selected by their peers for inclusion in the 2015 edition of Best Lawyers in America, the oldest and most respected peer-review publication in the legal profession.
Lane Powell Shareholder William T. Patton has been appointed to the board of directors for Cascade AIDS Project, an organization that provides educational services and outreach to thousands of Oregonians living with HIV/AIDS.