Idaho Deal Flow report: Numbers down, dollars take big jump

Private investment in Idaho companies dropped slightly from 2018 to 2019 — though Micron’s acquisition of IM Flash Technologies from Intel boosted the total dollars invested.

Overall, investment deals jumped to $4.42 billion in 2019, compared with $1.65 billion the previous year, but showed a 5% drop in the number of deals, according to the Deal Flow Report released June 11 at the Idaho Technology Council‘s Capital Connect Conference, held virtually. Overall, the number of deals was 154 compared with 161 in 2018.

The Deal Flow Report, now in its sixth 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 25% by both numbers and volume. While volume is similar to the previous year, the number of deals was down. Other major industries included consumer retail and materials & resources, which amounted to 18% and 15%, respectively.

As is typical over the past few years, there were few public offerings, with deal flow concentrated in investments and mergers instead.

In 2019, the sole public offering was the Pennant Group, an Eagle-based home health, hospice and senior living services company, which raised $443 million. The previous year, PetIQ was the sole public offering, which raised $115 million.

The biggest private investments were in Vacasa for $319 million, Integra Resources Corp., with three separate transactions totaling almost $37 million and Lovevery at more than $22 million. Vacasa, a Portland-based vacation rental company, has an additional headquarters in Boise. Integra Resources is a Vancouver-based mining company that owns properties such as the DeLamar gold and silver mines in southwest Idaho, while Lovevery creates a line of educational toys for children and babies.

The biggest merger and acquisition in 2019 was Micron, which spent $1.5 billion to acquire Intel’s interest in the parties’ joint venture, IM Flash Technologies, LLC (IM Flash)

Other major acquisitions in 2019 included two by US Ecology, which acquired NRC Group Holdings Corp. for $966 million in November 2019 and W.I.S.E Environmental Services for $23.5 million (Canadian) in August. PetIQ, of Eagle, spent $185 million in July to acquire Sergeant’s Pet Care Products Inc.

Of course, those are just the mergers and acquisitions where pricing was revealed. Compared with the 13 mergers and acquisitions where prices were revealed, there were more than 50 mergers or acquisitions with undisclosed prices. Most notably, those include Truckstop.com, the New Plymouth trucking logistics company that was purchased by ICONIQ Capital, a San Francisco-based privately-held financial advisory and investment firm. Industry sources said the price could have topped $1 billion.

Similarly, nine private placements didn’t reveal amounts, including StageDotO Ventures, a Seattle-based investment company that not only created a $50 million fund to invest in Boise technology startups but moved its headquarters to Boise as well.

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, particularly Boise, has also been attracting attention nationwide. According to QAD, Boise ranks No. 5 on its list of America’s most inventive cities with 357.53 patents issued per 100,000 people — likely a reflection of Micron’s inventiveness and Boise’s relatively small population.

In other rankings, the state and Boise did less well. STORAGECafé ranked Idaho No. 31 in terms of being prepared for a digital economy future, well ahead of neighboring states Montana and Wyoming and just ahead of Nevada, though behind Washington, Nevada and Oregon. According to that study, technology contributes $7 billion to the state’s economy.

Boise also ranked No. 185 in the Global Startup Ecosystem Report from StartupBlink, a big jump from the previous year’s No. 250.

In comparison, the Utah deal flow report showed 474 transactions for a total value of $25 billion. The most popular sector by number was technology and software, with 39%.