From Deseret News archives:
2005 a 'big deal' in Utah
Mergers, acquisitions, offerings boosted transaction figures
The MountainWest Capital Network will report during a Thursday event that overall Utah financial transactions in 2005 reached $9.2 billion, up from $3.9 billion in 2004. The deals included mergers and acquisitions, public offerings, venture capital deals and other fundings.
According to the Utah Deal Flow report, venture capital and private equity fundings in 2005 made up 84 deals valued at $417.3 million. The 2005 report included deals not historically categorized as venture capital, such as angel investments, so a comparison to last year's 85 venture deals valued at $399.4 million may not be valid.
Even so, Brad Bertoch, co-chairman of the Deal Flow committee, said that while the number of venture deals remained nearly the same between 2004 and 2005, transaction values were up.
"That tends to signal to me that we might begin to suffer from lack of venture quality deals," Bertoch said. "The venture guys will pay more money for a deal because there are fewer good deals. It's supply and demand. You have a choice. You either spend more money for a good deal or you invest in maybe not-so-good deals to get more deals."
Driving 2005's transactions were mergers and acquisitions, which were valued at $6.9 billion and made up 32 deals, up from $1.1 billion and 38 transactions in 2004.
The report noted that while a number of last year's mergers and acquisitions involved the sale of Utah-based companies to out-of-state buyers, there were several Utah-based companies that acquired out-of-state companies. They included Extra Space Storage's $2.3 billion buyout of Storage USA, SkyWest's $2 billion acquisition of Atlantic Southeast Airlines from Delta Air Lines and Zions Bancorp.'s $1.7 billion purchase of Texas-based Amegy Bancorp.
Devin Thorpe, founder of Thorpe Capital, a Salt Lake-based investment bank, said 2005 was a great year for Utah businesses.
"We've had a few big deals in the past, but oftentimes the big deals are non-Utah companies buying Utah companies," Thorpe said. "This year's big deals are Utah companies making the acquisitions and moving more jobs and more profit to the state. That's what is really kind of exciting."
The report said there were four public offerings by Utah companies in 2005 valued at $1.9 billion compared to five deals valued at $778.5 million a year earlier.
Huntsman Corp.'s initial public offering in February 2005 raised $1.5 billion. Extra Space Storage raised $174.8 million in a secondary offering in December, and Myriad Genetics raised $148.9 million.
The 2005 Utah Deal Flow report, which tracks financial deals across Utah, is in its 10th year. Brad Rich, chief financial officer of SkyWest Airlines, will talk about the his company's acquisition of ASA at a luncheon on Thursday hosted by MountainWest Capital Network.
E-mail: danderton@desnews.com
