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Mike Cote's Business Editor's Notebook: Acquisitions in NH -- A whole lotta dealmakin' goin' on

By MIKE COTE
August 12. 2017 6:11PM
James Doyle, senior sales engineer, talks to visitors during an open house in 2015 at FirstLight in Manchester. The Albany, N.Y.-based telecommunications service provider recently acquired a Nashua company that operates a fiber-optic network in New Hampshire, Massachusetts and Vermont. (UNION LEADER FILE)

The deals just keep on coming.

It's been a busy season for acquisitions in New Hampshire, with five notable Granite State companies getting snatched up this summer. They included two technology companies - DataGravity and Newforma - that were earmarked by business insiders as among the next likely takeover targets after Dyn was acquired by Oracle in November.

The takeovers underscore an increase in transactions among New Hampshire companies.

"I really can't remember being so busy, and so busy with deal activity," said Dennis Haley, a corporate attorney at McLane Middleton in Manchester whose practice includes mergers and acquisitions and software licensing. "It just seems like it's been deal after deal after deal for a couple of years. And I don't see it stopping."

This summer's public announcements began in June with Globe Manufacturing, a Pittsfield maker of firefighter protective gear, that agreed to be acquired by MSA Safety for $215 million in a deal that closed this month. The company employs 325 people in New Hampshire.

Three deals were announced in July:

. DataGravity, a Nashua-based technology company, was acquired by HyTrust Inc., a Mountain View, Calif., firm that specializes in data security.

. Data network provider FirstLight acquired 186 Communications, a Nashua company that operates a fiber-optic network in New Hampshire, Massachusetts and Vermont.

. A South Carolina company acquired the Hampton-based operations of Foss Manufacturing, a textile maker whose high-performance materials are used to make surgical masks and other products.

This month, Boston investment firm Battery Ventures acquired a majority stake in software company Newforma, which is based in Manchester.

While larger companies like Dyn make front-page news when they are acquired, most of the deals involve small businesses, which helped the state survive the recession, Haley said.

"We have some very large, very successful companies. But I think we weathered the storm better than many," Haley said. "While things definitely may have slowed down a bit dealwise (during the recession), I don't think we ever saw a huge drop off."

Haley attributes the rise in activity in part to the transfer of family-owned businesses.

"For a long time, we've been hearing about how there's going to be this tremendous transfer of wealth and family businesses from the so-called greatest generation or the baby boomers down to the next generation," he said.

Haley worked on a transaction over the past couple of years that involved the death of a company founder: "It went to other family members, and they ran it for a couple of years but then ultimately sold off."

Banks are also increasing their stakes, Haley said, noting the willingness of a bank in a recent transaction to increase the size of a loan at the request of a buyer who needed additional financing to close the deal.

"I think we're seeing the banks being aggressive and really just trying to put their money to work," Haley said.

Optimism abounds

Matt Benson, an attorney with Cook, Little, Rosenblatt & Manson, reports similar activity at his Manchester firm, which specializes in corporate law. In addition to M&A deals, Benson said the firm has been busy with financing deals both from the company side and the investor side.

"Companies are feeling optimistic about their valuations because they are willing to sell," Benson said. "Buyers are optimistic about how things continue to look. Investors seem more optimistic in terms of opportunities to put some money to work in some good companies. From our experience it all just translates into being busy doing a variety of different transactions."

And while the recent tech company deals have garnered most of the publicity, Benson said the activity cuts across all sectors.

"It hasn't been just manufacturing. It hasn't been just high tech," he said. "The impression we get is it's a pretty good time to being doing business - a lot of optimism."

Benson chairs the Live Free and Start Advisory Council - an initiative of the Governor's Office - and also chairs the governance committee on the New Hampshire High Tech Council. Both groups are trying to promote New Hampshire as a place for tech companies to do business and for startups to thrive.

"If you were to put signs on the Millyard buildings in Manchester for all of the tech companies that are located in the mill buildings, I think it would actually be a pretty impressive tech corridor that people probably don't fully appreciate or realize is there," Benson said.

While news that giant corporations like Oracle are scooping up homegrown companies like Dyn will help New Hampshire better market itself as a technology hub, Benson hopes outside companies coming to the Granite State will help nurture local startups.

"One issue that has pretty consistently been raised in New Hampshire is access to capital. I don't think it's a New Hampshire-specific issue. I think it's an issue everywhere except Silicon Valley," Benson said. "But some of the companies - Dyn is a good example - have been incredibly supportive of New Hampshire's entrepreneurial ecosystem.

"I'm hopeful that the buyers of those kinds of companies will continue the support that the Dyns of the world and the Newformas of the world have shown."

Contact Business Editor Mike Cote at 206-7724 or mcote@unionleader.com.


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