Sponsored by Lane Powell

The sell-out state

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


U.S. Bank’s history in Oregon dates back to 1891. It's owned by U.S. Bancorp in Minneapolis.
// Photo by Alexandra Shyshkina

In the global market, mergers and acquisitions are a regular part of the business practice, and historically venture-backed companies are built to sell. And although stories about buyouts make the headlines, there are still hundreds of Oregon-owned companies that haven’t sold. So any imbalance between big and small, between the eaters and the eaten, begs the question: So what? Does it matter if Oregon-owned companies are acquired by out-of-state firms? What kind of impact does this have on Oregon business and community?

The answers are complex, and among business leaders, there isn’t necessarily agreement. From an individual business perspective, a focus on exit strategies “is harmful,” says Raghu Raghavan, CEO of Act-On Software, a Beaverton-based provider of marketing automation software that last summer became one of Oregon’s acquirers, buying the assets of California-based Marketbright, also a marketing automation provider. “If you’re thinking about being acquired, you don’t optimize the company for growth,” says Raghavan, pointing to Nike as an example. "A company getting to that scale is not thinking about exits, they’re thinking about markets.” Act-On has grown from eight to 58 employees in two years and is on a path to triple revenue in 2012.

If thinking about getting out too soon is harmful, so is an exclusive focus on starting up. “There’s a love affair with starting new companies that can be very damaging,” says Andrew Nelson, a professor of management at the University of Oregon. “We need more attention to the very difficult stage of actually growing them.”

Nelson cited as an example the popularity of Startup Weekend Portland. “What happens after that weekend?” he asks. That love affair with the new, the small and the not necessarily directed extends to the state level, Nelson suggests. Unlike Seattle or San Diego with their vibrant biotech industries, “Oregon has been reticent to place bets in certain sectors,” Nelson says, preferring instead “to be all things to all people.”

Such diverse offerings may explain why Portland is such a buyer’s market. Danone acquired YoCream because the company was a “center of excellence,” with “expertise” in frozen products, unchartered territory for the French conglomerate, says spokesman Michael Neuwirth. The acquisition also reflected Danone’s “glocal” approach: “global in scale, local in business, tied to the earth and land in which we work,” says Neuwirth.

There’s no data showing what happens to Oregon companies after they’ve been sold, whether as a group they get bigger and better, or smaller and disappear. According to Tim McCabe, director of Business Oregon, the impact is wide-ranging. He cites companies such as Hermiston-based Snack Alliance and PV Powered in Bend, firms that were acquired but then continued to grow in Oregon.

Then there are financially struggling companies such as Jeld-Wen, “where outside purchase kept the business going and employing hundreds here in Oregon,” says McCabe. Tazo Tea falls into yet a third category, companies “that are purchased and do leave the state down the line,” he says.

For McCabe, the acquisition dynamic is almost irrelevant. “The bottom line is we work to keep companies and jobs growing in Oregon, whether it’s an Oregon-owned firm or not,” he says. Sean Robbins, CEO of Greater Portland Inc., echoes that view. Eighty percent of job growth comes from existing companies, he says. But in the global M&A marketplace, and in a city and state that isn’t a hub of private equity or venture capital, the critical factor isn’t so much maintaining local ownership but identifying opportunities to grow jobs even in the case of an acquisition — an approach he says is part of Greater Portland Inc.’s 2012 Work Plan.

Others take a less sanguine approach to the loss of some of Oregon’s most iconic companies, with even those who sold expressing some ambivalence. “A lot of the values that we created are still there, but it’s not the same family-owned company,” says Gun Denhart of Hanna Andersson. “It’s corporate culture focused on the bottom line.”

Dave Chen is more explicit about the downside of becoming a corporate colony. “When something is acquired, it becomes a division or unit, you lose that company’s contribution to the community and their investment in the community. The impact is terrible.”



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

Big Trouble in China?

Guest Blog
Tuesday, August 18, 2015
0818-wellmanthumbBY JASON NORRIS | CFA

Earlier this month, the People’s Bank of China (PBoC) announced they were going to devalue their currency, the Renminbi. While the amount of the targeted change was to be roughly 2 percent, investors read a lot more into the move. The Renminbi had been gradually appreciating against the U.S. dollar (see chart) as to attempt to alleviate concerns of being labeled a currency manipulator.


Money Troubles

September 2015
Thursday, August 20, 2015

The state’s angel investing fund gets hammered in Salem.


100 Best Nonprofits announced

Wednesday, September 30, 2015

1015-nonprofits01Oregon Business magazine has named the seventh annual 100 Best Nonprofits to Work for in Oregon. The rankings were revealed Wednesday night during an awards dinner at the Sentinel Hotel in Portland.


100 Best Nonprofits: Working for equality inside and out

October 2015
Wednesday, September 30, 2015

Striving for social equity is the mission of many nonprofits, and this year’s 100 Best Nonprofits to Work For in Oregon survey shows employees are most satisfied with their organizations’ fair treatment of differing racial, gender, disability, age and economic groups. But as a national discourse about racial discrimination and equity for low-income groups takes center stage, data show Oregon’s 100 Best Nonprofits to Work For still need to make progress on addressing these issues within their own organizations.


Inside the Box

September 2015
Wednesday, August 19, 2015

Screening for “culture fit” has become an essential part of the hiring process. But do like-minded employees actually build strong companies — or merely breed consensus culture?


Child care challenge

September 2015
Wednesday, August 26, 2015
0927OHSUhealthystarts-thumbBY KIM MOORE AND LINDA BAKER

Child care in Oregon is expensive and hard to find. We delved into the numbers and talked to a few executives and managers about day care costs, accessibility and work-life balance.


Car be gone

Linda Baker
Thursday, August 06, 2015
070615car2goblogthumbBY LINDA BAKER

Car and ride sharing services have taken urban areas by storm. Low-income and suburban communities are left at the curb.

Oregon Business magazinetitle-sponsored-links-02