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Investment report: 2016 saw more deals, less money

The Idaho Technology Council held it's 2017 Capital Connect Conference May 24 at the Stueckle Sky Center on Boise State University campus. Photo by Erika Sather-Smith.

The Idaho Technology Council’s 2017 Capital Connect Conference. The Deal Flow Report was released at the conference,  held May 24 at the Stueckle Sky Center on the Boise State University campus. Photo by Erika Sather-Smith.

Less money flowed around Idaho overall in 2016, but there were significantly more investment deals in 2016 than 2015, according to the Deal Flow Report released May 24 at the Idaho Technology Council’s Capital Connect Conference.

The Deal Flow Report, now in its third year, is an annual report commissioned by the Idaho Technology Council that highlights private placement investments and merger and acquisition activity for Idaho companies. This year’s report lists more than 166 deals — up from 127 in 2015.

Idaho businesses secured more than $1.3 billion last year, down from $15.8 billion in 2015 and $3.47 billion in 2014.

The disparity year-to-year is affected by many factors. The 2015 data reflected three deals by Albertsons, Micron and MWI Veterinary Supply worth $14.2 billion. And the ITC couldn’t get some of the companies involved in the biggest deals in 2016 to disclose details, said Blake Hansen, co-chairman of the Deal Flow Report Committee.

“It is an uphill battle that we face every year. It’s the Idaho way, to be independent,” Hansen said of reluctance to disclose deal information.

“It may take 10 years to get to the reporting culture we want to see,” he said.

JD Claridge developed the X PlusOne, a drone that can both hover and fly at fast speeds. Photo courtesy of xCraft.

JD Claridge developed the X PlusOne, a drone that can both hover and fly at fast speeds. Photo courtesy of xCraft.

Idaho Technology Council uses the report to create a transparent business culture that helps companies know where to go for investment by showing where other businesses have succeeded. Eventually, Hansen said he even wants to release the report quarterly instead of annually so the data can be revealed closer to real time.

“By the time the report comes out in May 2017, some of the 2016 data might feel a little stale,” Hansen said.

Some businesses contact the ITC with details of their deals, but Hansen and the Deal Flow Report Committee also spend thousands of hours hunting for information by searching press releases and meeting with lawyers who helped with transactions.

Even so, the ITC might have missed about 100 deals this year, based on Idaho’s population and comparisons to the number of deals other states see, Hansen said.

For instance, the ITC wasn’t able to get transaction details on what might have been one of the biggest deals of last year, the acquisition of Clearwater Analytics by Welsh, Carson, Anderson and Stowe.

In all, the report lists about 50 mergers and acquisitions with undisclosed transaction details.

“These numbers in the report may always be a little bit low until we develop a more transparent business culture,” Hansen said.

Still, the information the Deal Flow Report does capture provides a lot of value, especially for young businesses not sure where to start looking for funding, said Michael Hollenbeck, CEO of the healthcare analytics company Proskriptive.

The 2016 report details 97 private placement deals, up from 63 in 2015 and 72 in 2014. The report lists information about each company that received funding and the amount of money received. So while the total amount of money given to Idaho businesses decreased in 2016, private investment in Idaho more than doubled last year, rising from $220 million in 2015 to $550 million in 2016, according to the Deal Flow Report.

About Benton Alexander Smith

Benton Alexander Smith is a reporter for the Idaho Business Review, covering the Idaho Legislature, new business, technology and financial services.