The annual Idaho Deal Flow Report came out last week, and its statistics show some noteworthy trends, though you have to look beyond the toplines to find them.
The report comes by way of the Idaho Technology Council and participation of a number of private businesses (Alturas Capital and Holland and Hart among them), and “demonstrates the strong Idaho economy which is driving a demand for more talent and supports increased capital investment.”
Sounds like a positive and happy story, period. But the details are a little more of a mix.
It certainly shows a good deal of business activity. The report essentially monitors the number of substantial business transactions over the course of a year (in this case, 2018). There’s little by way of definition; the reports lists 163 “deals” for the year (loosely comparable to the annual totals over the last decade), but what constitutes a “deal” isn’t entirely clear.
The report also includes this reasonable disclaimer: “Readers should understand that the information
contained herein has been collected from several different sources and not all of the information contained in this publication has been independently verified, substantiated, or audited.” It did say it used an array of reports, some publicly available, and put more than 700 hours into its development.
The report does offer a number of category breakdowns, though, and that’s where some of the information gets interesting.
We do get an estimate of the dollar volume of the transactions: $1.73 billion last year, which is a significant amount but the second-smallest amount in the last decade; only 2016 was a little lower.
The deals were not spread evenly around the state. The Ada-Canyon County area accounted for close to two-thirds of the deals, and nearly all the rest were in the Panhandle, around Kootenai and Bonner counties. The average size of each deal was far larger as well in those two regions than elsewhere.
The report tracks number of public offerings, which truly can be considered a big deal. Over the years their number has fluctuated, peaking at a dozen each in 2010 and 2013; there were nine in 2012 and seven in 2011. Last year there was one, and three each in the two years prior.
There have been a number of mergers and acquisitions - 54 of those reported in 2018 - but while the numbers there have been stable, last year’s was the smallest in a decade, and the dollar amount involved was on the small side as well.
The report also totals “private placements,” which the Investopedia defines as “the sale of securities to a relatively small number of select investors. Investors targeted include wealthy accredited investors, large banks, mutual funds, insurance companies and pension funds.” That Idaho number was on the high side last year in number of transactions, but down to about average in dollar amount.
The picture you might take away from the breakdowns is a moderately slowing economy - not necessarily a bad thing, but lacking the indicators of a continuing boom. You also continue to get the sense of a highly regionalized and varied kind of economic growth, still very strong in Ada-Canyon and around Kootenai County, but relatively softer elsewhere.
All this does realistically reflect one of the hardest data points available, the tax revenue coming into the state of Idaho, which for this fiscal year has been running behind original estimates.
The deal seems to be: A somewhat slower economy ahead.