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Idaho equity investment soars to nearly $16 billion a year

The great John Wooden used to say, “Never confuse activity with accomplishment.” This phrase in particular seems appropriate when evaluating the data from this year’s Idaho Deal Flow Report.

Consider: While activity statewide remained robust, the total number of deals actually dipped just a bit in 2015. In fact, the five-year trend has been more or less flat, consistently between 130 and 160 deals per year. So if the number of activity has remained the same, what’s changed? That’s where the 2015 Idaho Deal Flow report starts to get interesting.

The nearly $16 billion in equity deals quadrupled 2014’s output and almost doubled the total from 2013 — the state’s previous five-year high-water mark. Large deals by MWI Animal Health, Albertsons and Kount headlined the historic effort. Other privately held Idaho companies also saw large deals, with nearly a quarter billion dollars in private placements in 2015. So while the number of deals has not increased, the amount invested is what Coach Wooden would have considered a championship season in Idaho.

What else can we learn from the Deal Flow Report? About 96 percent of that $16 billion investment came from two sectors — consumer/retail and technology. That isn’t necessarily surprising considering the large transactions and the strengths of these industries within the state, but it reinforces the need to continue to explore new businesses and markets to further diversify Idaho’s financial base.

Likewise, we see geographic disparities, with activity largely focused in the southern part of the state, in and around Boise. The Southwest shows the most strength, but that is expected as the population center of the state. This report has given us a reason to look at all parts of the state. We track transactions in north and eastern Idaho, and data shows that they hold their own in starting and growing exciting businesses. In some way, this report is starting to bring people together from across the state.

The release of the 2015 Idaho Deal Flow Report headlined the Capital Connect Conference on May 12 in Boise. The conference brought together state government, the entrepreneurial community and investors to discuss the region’s innovation economy and strategies for raising and securing capital in and out of state. It facilitated connections that could drive the next wave of in-state investment. The conference is typical of Idaho’s collaborative business environment, representing the kind of accomplishments that would make Wooden himself proud.

Blake Hansen is a managing partner at Alturas Capital and co-chair of the Idaho Technology Council’s Capital Connect Conference. This column appears in the May 17-June 14, 2016, edition of the Idaho Statesman’s Business Insider magazine

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