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Economic Summit: Mergers heat up

Corporate cash is flowing to acquisitions
Zalneraitis

IGNACIO – Mergers and acquisitions, which reached about $315 billion in the U.S. in 2013, are only expected to keep rising, an investment banker said Wednesday.

“It’s going to keep going up,” said Andre Trudell, managing director of UMB Financial Corp.

Trudell was among the panelists at the eighth annual Economic Summit at the Sky Ute Event Center. The daylong conference, organized by the La Plata County Economic Development Alliance, attracted more than 300 attendees.

Two major deals have rippled through Durango’s business world within the past year: Mercury Payment Systems was acquired by Vantiv, based in Cincinnati, for $1.65 billion in May. And in January, Zuke’s, a local pet food company, was purchased for an undisclosed sum by Nestlé Purina PetCare Co. of St. Louis.

The panelists said the economy is ripe for more deals.

“Money is cheap,” Trudell said. “It’s very easy to go out and get short-term or long-term financing.”

Some of the buyers will be international. Trudell pointed to the recent acquisition of the Waldorf-Astoria hotel in New York by a Chinese insurance company.

Since Nestlé Purina acquired Zuke’s, the company has added a few employees in Durango, mostly in marketing and sales, said Zuke’s Vice President Matthew Ronken. Zuke’s has about 24 employees in Durango, and about 10 more who work remotely.

Zuke’s was attractive to Nestlé Purina because of its compelling brand and backstory, said William Broun, vice president of strategy and development for the St. Louis company.

Founder Patrick Meiering started Zuke’s after getting the idea to make energy bars for dogs while on a hike in the San Juan Mountains with his dog, Zuke. Zuke became exhausted, but recovered after Patrick gave the dog an energy bar.

Broun and Ronken said Zuke’s is good at a few things that often elude Nestlé Purina, including forging relationships with small retailers.

“We’re really good at making lots and lots of dog food and cat food and getting it into stores like Walmart, like PetSmart, like Target,” said Broun. “Where we’re less good is those mom-and-pop stores.”

The corporation is learning about entrepreneurship from Zuke’s, said Ronken. “We look at Zuke’s as a bit of a learning lab.”

Other sessions at the Economic Summit dealt with health-care changes under the Affordable Care Act, technology, strategies for executives, higher education, conflict management and passing on costs to consumers.

The keynote speaker, Daniel Epstein, founder of the Unreasonable Institute, discussed the value of entrepreneurs and what helps them succeed.

In his opening remarks, Roger Zalneraitis, executive director of the Economic Development Alliance, discussed the conference’s theme of change.

“Change is not a political slogan,” he said. “It’s a fact of life.”

Zalneraitis pointed to services in the so-called “sharing economy,” such as Airbnb, which allows users to rent out private homes for short stays. Airbnb has nearly as many rooms under management as Hilton Hotels & Resorts, he said.

Areas of focus for the alliance include improving Durango’s air service, spreading high-speed Internet access throughout rural parts of the county and building a business park. More commercial space is needed for businesses to expand, he said.

“We want to make La Plata County the premier Rocky Mountain location to do business,” Zalneraitis said. “It’s a tall order.”

cslothower@durangoherald.com



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