|| Print ||
|Articles - Jan/Feb 2012|
|Thursday, January 19, 2012|
Page 4 of 5
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.”
|OHSU researchers work on AIDS vaccine|
|Lean in? Not Sabrina Parsons.|
|Oregon agriculture - not just a commodity|
|The cable guy|
|Outside the box|
|Federal Reserve could ease stimulus sooner rather than later|
|Measles cases rise in U.S.|
|World mourns Nelson Mandela|
|Supreme Court to decide patent fracas between Google and Microsoft|
|20,000 apply for 400 jobs at Ikea in Spain|
|Twitter names first female board member|
|U.S. fast food workers strike|
Produced by the Oregon Business marketing department
When the Portland-based manufacturing company Glass Alchemy, Ltd. was first nominated for an Oregon State University Austin Family Business Excellence in Family Business award in 2004, husband-and-wife team Henry Grimmett and Susan Webb-Grimmett, were honored and optimistic about their chances of winning.
Some employers have embraced the use of employment arbitration agreements as a way to manage and mitigate the rising costs, risks and liabilities associated with employment-related claims. Historically, employment arbitration agreements require employees to present employment-related claims, such as employment discrimination, wrongful discharge, harassment, or claims for wages or compensation to an arbitrator, in lieu of proceeding to court.
Produced by the Oregon Business marketing department
Boly:Welch was founded in 1986 based on a close connection between Diane Boly and Pat Welch. The two had worked together at another recruitment firm and shared certain core values: passion for their work, a sense of humor, a commitment to their community and a desire to create a healthy, nurturing work environment.
The Oregon New Lawyers Division of the Oregon State Bar recognized two of Barran Liebman’s own at their Annual Meeting and Social on November 1.
Barran Liebman LLP is proud to announce that Iris Tilley has been named a partner with the firm. Iris has been with Barran Liebman since 2009 and is a member of the Employee Benefits practice group. She advises employers in all aspects of employee benefits, including ERISA, COBRA, HIPAA, retirement plans, compensation agreements, and health care reform.
Dunn Carney will host its annual Ag Summit on Jan. 10, 2014 at the Holiday Inn in Wilsonville, OR. We are very pleased to welcome Dr. Sherri Noxel, Director of the Austin Family Business Program at Oregon State University College of Business as our Keynote speaker.