Here’s our breakdown of the top 11 business stories in the “State of Deseret” during the first quarter of 2021.
It’s hard to imagine, but Deseret Business Watch is now just shy of being three months old.
Thank you to everyone even remotely involved with helping to make this new media property successful. Your encouragement, suggestions, and support are greatly appreciated.
That said, I thought it might be beneficial to take a few minutes to look back over the first quarter of 2021 to identify and rank what I felt were the most important business news stories for the State of Deseret from the first three months of the year.
So that’s what I’ve done, and what you’ll find below is my take on the Top 11 Business Stories of the First Quarter of 2021. Enjoy.
Utah’s No. 11 Business Story of Q1 2021: Federal, National & Local Governments Impact Utah’s Business Community
When national, statewide and local elections line-up in the same year, it’s almost impossible for re-elected or newly elected politicians (and the bureaucracies that support them) to not have an impact on their constituents. And such was the case in the first quarter of the year following the fall elections of 2020.
Case in point, President Joe Biden signed 30 Executive Orders in his first three days in office, at least nine of which had (or will have) a direct or indirect impact on Utah businesses. {See Biden, Cox, Huntsman, and More for additional details.}
Similarly, during his inaugural speech, Utah Governor Spencer Cox unveiled the One Utah Roadmap of his administration which provides a 500-day overview of where he would like to take the State of Deseret.
Additionally, Salt Lake City Mayor Erin Mendenhall unveiled her 2021 RECHARGE, RESET, REBOUND plan for the state’s capital city during her late January “State of the City” address.
Last but not least was the January 20 ruling by the U.S. Department of the Interior that temporarily halted oil and gas leasing (and permitting) on federal and tribal lands, including on the more than 65% of Utah that are controlled by the federal government.
This is just a smattering of the decisions and programs implemented by government in Q1 2021 that have already had impact on businesses in the state.
Utah’s No. 10 Business Story of Q1 2021: Square Leverages Favorable State Laws to Launch an Industrial Bank in Utah
Utah has quietly become a financial center in the United States over the past several decades for two primary reasons:
- The newer reason is due to the state’s growing status as a software center in the U.S. and around the globe, while
- The older reason is the favorable banking laws that enable the creation and housing of Industrial Banks in Utah (endeavors that have been underway for over 50 years).
During the first quarter of 2021 one of the leading Financial Technology firms on the planet (Square), announced that it had formally opened Square Financial Services as an IB headquartered in Salt Lake City.
With the opening of this Industrial Bank, Square has (in essence) brought its banking in-house.
Square Financial Services intends to focus initially on existing Square customers for depositary and loan offerings.
Utah’s No. 9 Business Story of Q1 2021: Recursion Pharmaceuticals Announces Plans for an IPO
Salt Lake City-based Recursion Pharmaceuticals is clearly the most prominent and most promising drug discovery and development firm in Utah.
So even though it announced last fall it had raised a $239 million round of Series D funding, I was not surprised to learn in late March that it had begun paperwork that will lead it to a public offering in the near future slated to raise at least $100 million.
Details on the planned IPO can be found here.
Utah’s No. 8 Business Story of Q1 2021: Cricut Goes Public and Raises $265 Million
It’s not often that one sees a nearly 60-year-old company begin selling shares on Wall Street. But that’s exactly what happened in late March when South Jordan-based Cricut completed its IPO and raised $265 million in the process.
The full story about the Cricut IPO can be found in this DBW story titled Cricut & Recursion IPOs, Neighbor Funding, and More.
Additionally, the market capitalization for (NasdaqGS:CRCT) is nearing $4.5 billion as the per share price finished at $19.99/share, just below the initial offering price of $20.
Utah’s No. 7 Business Story of Q1 2021: HealthEquity Raises $400 Million in a Secondary Public Offering
When a company sells its stock to the public for the first time it’s typically described as an Initial Public Offering.
If it sells additional shares to the public in the future, such a transaction is generally known as a Secondary Public Offering.
Such was the case in mid-February when Draper-based HealthEquity raised $400 million by selling additional shares of itself in a secondary offering. This was the second-largest financial transaction completed in the quarter by a publicly traded Utah firm.
Utah’s No. 6 Business Story of Q1 2021: Owlet Plans to “Go Public” by Merging into a SPAC
Lehi-based Owlet, the self-proclaimed “Connected Nursery” company, plans to “go public” by merging with a so-called “blank check” company, netting $325 million in the process.
An overview of the planned merger with this pre-funded, publicly traded Special Purpose Acquisition Company (aka, SPAC), was reported in the February 22 issue of Deseret Business Watch.
I invite you to check it out.
Utah’s No. 5 Business Story of Q1 2021: Altabancorp Proxy Fight with the Gunther Family Trust
Although this story is one that’s received little if any play outside of the digital pages of Deseret Business Watch, the unfolding proxy fight between Altabancorp (NasdaqGS:ALTA) and the Gunther Family Trust is clearly one of Utah’s top business stories of the quarter.
This news was first reported by DBW in its January 28th issue titled A Battle for the Soul of Altabancorp.
In simplest terms, members of the extended Gunther family, either as individuals (or through entities that they own), control over 31% of the outstanding shares of Altabancorp today.
Such ownership traces back to 1951 when American Fork businessman, Orville Gunther, was invited to join the bank’s board of directors. Some 20 years later, the Gunther family had acquired over 50% of the outstanding shares of the bank.
According to filings with the U.S. Securities and Exchange Commission (SEC), the Gunther Family Trust believes that ALTA’s executives and board are mismanaging the community bank. Conversely, said execs and board members believe they’re doing a great job, thank you very much.
Hence, as noted in the March 19th issue of DBW titled Micron, Altabancorp vs. Gunther Family, and More, the Gunther family has now issued a letter to all ALTA shareholders calling on them to not participate in the upcoming shareholder vote to elect/re-elect board members.
And both Altabancorp and the Gunther Family Trust has hired seasoned law firms, respectively, to assist them in what is becoming a fight for control of ALTA.
{NOTE: As of today, no Gunther family member serves on the Board of Directors, nor does it appear that any family members serve as an officer, of Altabancorp.}
Utah’s No. 4 Business Story of Q1 2021: Micron Decides to Leverage Utah’s Red Hot Real Estate Market and Sell its Multi-Billion-Dollar Plant in Lehi
Worldwide Covid-19 pandemic notwithstanding, anyone paying the tiniest bit of attention recognizes that Utah’s real estate market has been on fire of late.
Such recognition has apparently reached Boise as Idaho’s largest technology firm, Micron Technology, announced plans during the first quarter of the year to sell its 2.4 million square foot semiconductor plant in Lehi.
What kind of price tag such a Fab would warrant on the open market is not known, although my guess is that it’s worth at least $5 billion.
But Micron has said it is already in talks with several potential buyers and expects to close the transaction before the end of 2021.
Utah’s No. 3 Business Story of Q1 2021: Over a Dozen Mergers/Acquisitions Completed by (or with) Utah Firms
At least 15 Utah firms were acquired (or acquired another firm), during the first quarter of 2021 — or such acquisitions were announced and/or in-process during the quarter.
By my calculation, these Merger & Acquisition transactions are probably worth over $5 billion in total.
Case in point, the biggest deal still in play is the pending $3.8 acquisition of Draper-based Pluralsight (NasdaqGS:PS) by Vista Equity Partners.
The other M&A transactions completed during the quarter (or still in play) include
- Sportsman’s Warehouse Acquisition ($765MM, in play)
- StorageCraft Merging Into Arcserve (amount unknown, in play)
- Revelstoke Capital Partners Acquires Archetype Innovations and Folds it into Carrus (amount unknown, completed)
- Banning Construction Services Merges into Kaiva Services (amount unknown, completed)
- Camping World Acquires Nielson RV (amount unknown, completed)
- HealthEquity Acquires Luum (amount unknown, completed)
- Dental Intelligence Acquires Modento (amount unknown, completed)
- Alianza Acquires CounterPath (amount unknown, completed)
- foreUP Acquired by ClubEssentials (amount unknown, completed)
- Locked on Podcast Network Acquired by Tegna (amount unknown, completed)
- Quality Tire Acquired (amount unknown, completed)
- Strata Fund Acquired by Alter Domus (amount unknown, completed)
- Pluralsight Acquires Next Tech (amount unknown, completed)
- C9 Capital Acquires EquityNet (amount unknown, completed)
Whew!
Utah’s No. 2 Business Story of Q1 2021: Qualtrics IPO Raises $1.55 Billion for an Initial Valuation of over $28 Billion
The February 1st edition of Deseret Business Watch summarized the highlights of this major news story for Utah’s business community.
But (in short), Provo-based Qualtrics finally became a publicly traded company on January 28, with its shares starting the day at $40, 33% higher than the settled-upon offering price of $30/share.
Qualtrics’ Initial Public Offering raised the company $1.55 billion, and the firm’s market capitalization (aka, its value as a company) hit nearly $28 billion several days later.
Unfortunately, its price per share has since dropped significantly, closing at $32.62 yesterday, down nearly 40% since its high of $55.28/share on February 5th.
To be clear, however, Walldorf, Germany-based SAP still owns over 79% of the total universe of Qualtrics stock, meaning the company is still closely controlled.
Nevertheless, all indications are that Qualtrics is continues to be on a roll, which makes its position as Utah’s No. 2 Business Story for Q1 2021 even more clear.
Utah’s No. 1 Business Story of Q1 2021: Utah Businesses Raise over $1 Billion in VC Money
Did you know that Utah firms in the state raised over $1.02 billion in Venture Capital funding during the first three months of the year?
Put into context, that is more than all the VC dollars raised by Utah firms in ALL OF 2020*.
In fact, only twice over the past 30 years have Utah enterprises generated more VC interest for an entire year than the venture dollars that poured into the State of Deseret in Q1 of this year (2015: $1.3 billion; and 2019: $1.1 billion).
Interestingly, the bulk of the monies hit during the first eight days of 2021, with $758 million closed at the beginning of the quarter.
This makes that 8-day period more successful from a fundraising standpoint than 4 of the past 10 years. Craziness!
Utah’s Top 5 VC Fundings for Q1 2021 were:
- MX, $300MM (January)
- WeLink, $185MM (January)
- Divvy, $165MM (January)
- SimpleNexus, $108MM (January)
- TaxBit, $100MM (March)
Each of these five firms noted above are likely IPO or M&A candidates in the months/years ahead, with a high potential for them to have outsized impacts on Utah and the markets they serve.
Congrats to all Utah-based firms that raised venture dollars during the quarter!
Look Out World — Here Comes Utah!
Clearly, 2021 is off to a great start for Utah’s business community, and by extension, many of Utah’s citizens as well.
That said, I believe there is still much we can do to support all Utahns to reach their fullest potential, and yes, continue to make the State of Deseret a “Pretty Great State.”
So best wishes to all for a fantastic Q2 2021 and the balance of the year.
* — NOTE: Venture capital fundraising data in this section is available from PwC here.
NOTE: This article was originally published by Deseret Business Watch. A few minor editorial changes have been made with this version to better match the current Silicon Slopes writing style.
