Qualtrics, SLC Plan, Prison Restrictions, and a LOT More (Week of Jan. 25-31)
Utah's largest IPO ever, Salt Lake City's 2021 Plan, President Biden restricts private federal prisons, acquisitions, new facilities & more highlight this weekly review issue
It may have taken nearly two decades to accomplish, with an $8 billion payday along the journey, but Qualtrics is finally a publicly traded company.
Clearly, Qualtrics’ Initial Public Offering last Thursday was the biggest business story to happen in Utah last week — by a long shot. (And without argument, the IPO of the Provo-headquartered eXperience Management company is the biggest story of the still new 2021 year.)
In addition, the oversubscribed interest in the spinout from Germany-based SAP drove the pre-offering per share price target from an early-on low $20-range before jumping to a settled-upon price of $30 per share … except that when shares actually began trading Thursday afternoon, they began selling at over $40/share.
As a result, over $1.55 billion was raised in the IPO. This valued Qualtrics (NASDAQ:XM) at north of $28 billion at the end of the trading day on Thursday.
After the IPO, SAP controls slightly over 79% of the newly traded company, while new investors will own just over 15%.
Interestingly, one of the largest private equity firms in the world (Silver Lake Technology Management) negotiated a private investment transaction with SAP that allowed Silver Lake to acquire 4.5% of Qualtrics for $550 million before the public offering.
Qualtrics Co-Founder and Chairman, Ryan Smith, also made a similar deal with SAP in December, purchasing 6 million shares for $20 per share.
Bottom line? Thursday was a banner day for SAP, Qualtrics, their shareholders, Silicon Slopes, and the entire state of Utah.
Kudos all the way around.
Mayor Mendenhall Unveils the 2021 Plan for Salt Lake City
Citizens of Salt Lake City (and the rest of the state) gained a clear understanding of where Mayor Erin Mendenhall plans to take the Capital City during this year when she unveiled her “RECHARGE, RESET, REBOUND” 2021 plan last week. {Here’s a link to an PDF online copy of the plan.}
According to Mendenhall, the 2021 SLC plan centers on four objectives:
Our Growth,
Our Environment,
Our Community, and
Our City Family.
There were a number of programs, initiatives and ideas in the 2021 plan that I felt at least touched upon on the Salt Lake City business community. Of these, I was especially intrigued by the following items that Mendenhall addressed:
Amplify and bolster Salt Lake City’s business and cultural districts,
Continue support for small businesses struggling with COVID adjustments and recovery.
Update the Department of Economic Development’s policy agenda and strategic plan to ensure that initiatives are geographically and socially equitable in perpetuity.
Clarify the purpose of the Economic Development Loan Fund and allocate funds to a Small Business Revolving Loan Fund.
Drive forward Tech Lake City and BioHive initiatives, and pursue additional partnership opportunities to further grow and expand the life sciences industry.
Pursue next steps with Sorenson Impact Center on a social impact bond.
Work with healthcare innovation companies in SLC to create apprenticeships for our residents.
Improve building permitting processes and accessibility by implementing a single point-of-contact concierge model for developers.
Continue the capital asset management work to support projects and goals that require long-term capital investment and best use and leverage funding streams.
Create a Construction Mitigation Fund policy to support businesses adjacent to and impacted by City-led construction.
Support the RDA’s completion and implementation of its sustainability loan interest rate reduction thresholds and criteria.
Support RDA’s strategic use of financial tools and cooperation with other taxing entities to mitigate the impacts of gentrification in project areas, particularly 9-Line, North Temple, and State Street.
Chart a path forward to have tiny homes in place (in Salt Lake City) by Winter 2021-22.
Begin the process of adopting the Life on State plan and update the zoning along State Street.
To be clear, the entire 2021 SLC Plan included scores of itemized priorities across all four focused objective areas. And some might argue that each priority touches at business in the Capital City at least tangentially.
But from my perspective, I felt the 14 items noted above were particularly noteworthy.
{By the way: Mayor Mendenhall is Very Impressive; I can see why she was elected. I can also see her being a serious contender for higher office, should she choose to pursue such a path.
{Click here to see a recording of Mayor Mendenhall delivering her 2021 “State of the City” address on Tuesday, January 26, 2021 (courtesy of KSTU—Fox13).}
President Biden’s New Executive Order Puts Ogden-based MTC on Notice
During his second week in office as the Commander in Chief, President Joe Biden continued to utilize Executive Orders to undo programs / initiatives implemented by President Trump or enact new directives aimed at transforming the country into a more progressive / liberal country.
Once such EO signed last week was positioned as helping erase systemically racist approaches in the federal prison system. As a result, the Biden Executive Order directed the U.S. Department of Justice to “phase out” the use of privately run federal prisons.
However, if you did not know this, one of the largest providers of private jails and prisons in the United States is Management & Training Corporation in Ogden, Utah.
It’s clear that MTC does more than operate prisons, as it also offers such services as Job Training and Economic Development programs globally.
But MTC does run/manage at least one federal prison in the U.S., and that’s the
Giles W. Dalby Correctional Facility in Post, Texas.
I suspect it is unlikely that this particular Biden EO will have any near-term impact on MTC or any other company providing private prison management/operations services to the U.S. government.
But are such changes coming? Absolutely.
A Surprising Environmental Ruling by the BLM
You may recall that during the first days of the Biden administration, the Department of the Interior essentially shut down all new oil and gas leases and operations on federal lands.
Among those impacted by new ruling was the Ute Indian Tribe, which objected most strongly to Acting Secretary de la Vega, an objection strongly supported by Utah Governor Spencer Cox. {Learn more about this here under the subhead: “Ute Nation Cries Foul Against Biden.”}
However, in a head-scratching move last week, the Bureau of Land Management approved plans to increase coal-mining operations 7.2 million tons at the Lila Canyon Mine in Emery County.
Brian Maffly with the Salt Lake Tribune published an excellent write-up on the details surrounding this story here.
Utah Acquisitions you Might Have Missed
News about two acquisitions involving Utah-based companies crossed my desk last week, items that may or may not have hit your radar.
The first acquisition of note was news that Utah-based Locked on Podcast Network was acquired last week by Tegna (NYSE:TGNA), the former Gannett Co. media company that owns 62 television stations and four radio stations in 51 U.S. markets. FYI: Tegna generated $2.69 billion in revenue in 2019 (ended Dec. 31).
Started in 2016 by David Locke (the radio voice of the Utah Jazz), Locked On
produces over 160 podcasts,
covering every major league sports team in America, with
600+ episodes published weekly, and
over 8 million listens/month.
Financial terms of the acquisition were not released, but Locke and his team will continue to operate Locked On Podcast Network as a “standalone business” within Tegna. You can read the news release here.
The other acquisition involved Salt Lake City-based Quality Tire, with all nine of its operations acquired in early January by Washington, Missouri-based Purcell Tire & Service Centers.
Prior to the merger, Purcell was the fifth-largest commercial tire dealer and ninth-largest tire re-treader company in the U.S., with 2019 revenues of $230 million.
Each of the Quality Tire locations will be re-branded as Purcell stores, and Purcell now plans to expand into the west coast.
Business Expansions Announced
Last week I learned about two out-of-state companies that making waves with facilities in the State of Deseret.
Case in point is Houston, Texas-based Waste Management (NYSE:WM), one of the largest “garbage” companies on the planet, which recently opened a 50,000-square-foot Material Recovery Facility (recycling plant) inside an existing building in Salt Lake City.
The new MRF features over 2.5 miles of conveyor belts to sort 35 tons of refuse each hour. Total cost to WM? $17 million.
Waste Today provides a great write-up on the new SLC-based MRF here.
Additionally, MicroGEM of Charlottesville, Virginia is about to open two new production facilities to manufacture its “innovative Spitfire6830 SARS-CoV-2 testing system, a high-performance, PCR-based point-of-need saliva test.” (Bolding added for emphasis.)
According to a spokeswoman for the company, the larger of the two facilities is being completed in Ogden, Utah, and when operational will fill 69,000-square-feet of space.
The MicroGEM news release states that its “Spitfire6830 system is designed to detect SARS-CoV-2 in both symptomatic and asymptomatic individuals.” MicroGEM says it plans to submit its system to the U.S. Food & Drug Administration for Emergency Use Authorization once the company completes final development of the Spitfire6830.
Final News Tidbits from “Deseret Business Watch”
Last of all, a two final news tidbits from (or that may impact) Utah’s business community.
Former Major League Baseball star, Dale Murphy, has joined Orem, Utah-based LiveView Technologies as its Executive Vice President of Sports. The Murph was a two-time MVP who played in the Bigs for 18 years, most of it with the Atlanta Braves. {Here’s a link to a write-up on Murphy’s hiring.}
Additionally, if Utah State Representative Karianne Lisonbee (R-14) has her way, catfishing will become illegal in the state. Not fishing for catfish. But impersonating someone else online. For the details, check out H.B. 239 here: Online Impersonation Prohibition.
Last of all, Deseret Business Watch published its first in-depth feature story last week about an apparent serious falling out between the leadership / management team of Altabank and its largest shareholder group.
To get the full story, please read A Battle for the Soul of Altabancorp.
In the meantime, please feel free to reach out if you have any thoughts on a business story for the State of Deseret you think others would find worthwhile. Thanks.
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About the Author
David Politis is a Marketing Mercenary, which is a fancy way of saying that organizations and individuals hire him to solve their marketing problems. To learn more, please feel free to visit David’s LinkedIn Profile or the website for his business: The David Politis Company. If you have a story idea for him (or would just like to connect), you can reach him at me@davidpolitis.com.