A trend of local St. Croix region firms being acquired by outside companies shows no signs of stopping.
So say economic development leaders in the area, who characterize the increased corporate interest in the region as largely beneficial.
According to Bill Rubin, (pictured here) executive director of the St. Croix economic development corporation, there is “no reason to doubt” that as opportunities present themselves in hospitality, manufacturing, medical technology or elsewhere, acquisitions of local companies will continue to occur.
“I don’t have reason to think that trend may stop,” Rubin told WisBusiness.com.
Some notable examples include River Falls-based Interfacial Solutions, a research and development technology company, being acquired by Stratasys in 2014.
Then in 2015, Eurofins Scientific acquired River Falls-based BioDiagnostics, a seed and plant-tissue testing laboratory that performs DNA analysis.
And in 2016, Hudson-based Phillips-Medisize, a manufacturer in the medical industry, was obtained by Molex, a technical systems manufacturer with over 40,000 employees worldwide.
Acquisitions like these can help the region, according to Blake Fry, president of the Hudson Area Chamber of Commerce & Tourism Bureau.
“This has not been a negative,” Fry said. “Typically the high-tech companies keep operations here, or sometimes expand them.”
Fry sees the acquisitions of local companies as a matter of course, given the region’s tendency to support certain industries.
“I think it’s going to continue for no other reason other than high tech, particularly plastics, is big here,” Fry said. “As they go from startups to more a mature phase, they are gaining a lot of attention.”
Arbor Investments, a Chicago-based private equity firm that focuses on the food and beverage industry, has been particularly active in the St. Croix area. It acquired River Falls-based Best Maid Cookie Co. in 2014, and Hudson Baking Company in 2015.
CrossAmerica Partners is a Philadelphia-based wholesale distributor of motor fuels, and operates over 600 fuel retail sites across the country.
It obtained Hudson-based Erickson Oil, a convenience store operator, in 2014, before buying Hudson-based SSG Corporation in February of 2016. That second acquisition put CrossAmerica in control of 31 franchise Holiday stores in the state.
These kinds of acquisitions are “reflective of what’s going on around the country,” according to Rubin. “To my knowledge, it’s been business as normal.”
Acquisitions show the benefit of “corporate lighthouses that see value in corporate giving and engagement in the community,” he says.
But there could be a downside to the trend. According to Fry, acquisitions can sometimes cause companies to move out of the area.
Rubin points to certain acquisitions in which there is “duplication of effort,” which can lead to loss of jobs.
Purchases can also lead to the loss of a “go-to-guy,” as the familiar face of a company might change along with the shift in control.
“You lose that–the personal relationship with the owner or founder–and perhaps decision-making is made on the other side of the country,” Rubin said.
While acknowledging that this can happen, Rubin says he has not seen that occur firsthand in his time with the St. Croix EDC.
All in all, Rubin does not expect much detrimental impact from the purchases, and calls the St. Croix Valley “a real gem.”
“We’re growing so fast here, we’re almost out of land for people to put things,” Fry joked.
–By Alex Moe