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Idaho Deal Flow report: Numbers are up, dollars are down

 

photo of tsheets tshirts

The $340 million acquisition of TSheets by Intuit was the biggest one of the whole year. Photo by Sharon Fisher.

Investment deals dropped to $1.73 billion in 2018, compared with $2.04 billion the previous year, but showed an 11% increase in the number of deals, according to the Deal Flow Report released May 8 at the Idaho Technology Council’s Capital Connect Conference. Overall, the number of deals was 163 compared with 147 in 2017.

The Deal Flow Report, now in its fifth year, is an annual report commissioned by the Idaho Technology Council (ITC) that highlights private investments and merger and acquisition activity for Idaho companies.

As with previous years, technology and software companies were a leading contributor to the deals, with 39% by numbers and 24% by volume. That’s down from the previous year, but last year’s results were skewed by a single Micron public transaction of $1.2 billion. Other major industries included consumer retail and materials & resources, which each amounted to 33% by numbers and 20% by volume.

photo of blake hansen

Blake Hansen

“This year, neither Micron nor Albertsons had transactions,” said Blake Hansen, managing partner with Alturas Capital and Deal Flow co-chair.

In 2015, deal flow volume was $15.8 billion because Albertsons acquired Safeway and Micron acquired Inotera Memories. “The largest companies in Idaho have a big impact on the Deal Flow Report whenever they have transactions,” he said. “This year, companies of all sizes contributed.”

In 2017, the sole public offering was PetIQ, an Eagle pet prescription company, which raised $115 million. The same was true in 2018, when PetIQ was again the sole public offering, with an addition $78 million in September.

The biggest private investments were in Vacasa for $64 million, Tango Card for $35 million and Hecla Mining at more than $30 million. Vacasa, a Portland-based vacation rental company, has an additional headquarters in Boise. Tango Card, which helps companies set up and manage digital rewards programs, received Series C funding from FTV Capital in May 2018.

The biggest merger and acquisition in 2018 was TSheets, which was acquired by Intuit for $340 million. The Eagle timesheet management software company announced the acquisition in December 2017, but it wasn’t finalized until January 1, 2018, so it made the 2018 list.

Other major acquisitions in 2018 included two by PetIQ, which acquired VIP Pet Care for $220 million in January 2018 and HBH Enterprises for $14.8 million in October. Hecla Mining, of Coeur d’Alene, also made two acquisitions: Klondex Mines Ltd. for $153 million in July 2018, and the Toboggan Project of New Jersey Mining Co. for $3 million in May 2018.

Notably, the two major acquisitions meant Eagle had more deal flow in total volume ($731 million) than Boise ($630 million), Hansen said. “This is the first time on record that Eagle outperformed Boise.”

Idaho companies actually raised even more capital than was included in the report because a number of companies wouldn’t reveal their information. For example, 10 of the 92 private placements and 54 of the 72 mergers and acquisitions, didn’t reveal amounts.

For now, the report collects information on deals by working with venture capital (VC) databases, looking at transactions considered under Regulation D by the Securities and Exchange Commission, and reaching out to providers such as the Boise Angel Alliance. Alturas then validates these data points through company executives.

Idaho also continues to get more attention from VCs outside the state. For example, earlier this year the Bay Area VC firm Iconiq made an unspecified investment in Truckstop.com, which some industry sources estimated could have been up to $1 billion. That deal will be reflected in the 2019 report.

In comparison, the Utah deal flow report, released earlier this month, showed 483 transactions for a total value of $14 billion. The most popular sector by number was technology and software, with 38%.

About Sharon Fisher

Sharon Fisher is an Idaho Business Review staff writer, covering financial institutions, technology, and business development. She holds a bachelor of science in computer science from Rensselaer Polytechnic Institute, and a masters in public administration and graduate certificates in geographic informational analysis and in community and regional planning from Boise State University. She likes explaining things and going to meetings. Join me on Twitter at @IBR_SLFisher.