'Locally owned' still prevails here

As the Flathead Valley population and economy grow, an increasing number of businesses in a variety of sectors consider the Flathead Valley a desirable market.

Buyouts by big firms not that common yet in Flathead Valley

By KRISTI ALBERTSON

The Daily Inter Lake

Some companies simply relocate. Others believe acquiring an established business is an effective way to enter the market.

"We're there because it's a wonderful community," said Worthing Jackman, chief financial officer for Waste Connections.

The Folsom, Calif.-based solid waste services company bought Evergreen Disposal in April. With $800 million in annual revenue, Waste Connections is the fourth-largest publicly traded solid waste company in the country.

"Our focus is on secondary and suburban markets," Jackman said, explaining that the company's goal is to expand its presence in the West, especially in rural communities.

Waste Connections serves more than a million customers in 23 states, most of them west of the Mississippi River. In Montana, the company owns disposal businesses in Hamilton and Miles City as well as Kalispell.

"It's where the people are moving," Jackman explained. "Generally the demographics are people kind of move east to west."

Acquiring Evergreen Disposal "fits in quite well with that," he said. "It's just part of our expansion strategy."

The company strives to "stay ahead of the curve," he said; this was one of the factors in its decision to purchase Evergreen Disposal.

"It's a very attractive market with good growth characteristics," he said.

Large companies such as Waste Connections benefit the small communities they enter by adding money to the local economies, he said. His business can improve the local subsidiary by purchasing additional equipment and containers and by expanding the service area, he said, all while maintaining the company's former name and people.

"If we're good at what we do, you never know we bought it," he said.

Lacking a larger company to fall back on can present a challenge for locally owned businesses, said Kyle Schellinger, vice president of Schellinger Construction in Columbia Falls.

The family-owned and -operated business has been in the valley for 39 years.

"If our reputation should happen to falter, that can place some hardship on us," he said, "whereas other companies, larger companies, have other companies that can help them absorb the losses."

The benefit to remaining a locally owned business is that all the people in the valley know if they hire Schellinger Construction, their money stays in the valley, Schellinger said.

Remaining a family-owned company is a priority. His grandfather founded the firm; his father, Al, is the current president. Schellinger himself has been in the business for 17 years.

"That's something we all definitely pride ourselves in and make it a big part of our life," he said.

Maintaining local leadership hasn't impacted the company's ability to compete with larger businesses. Costs are "relatively the same" in terms of the price of equipment, materials and labor, Schellinger said. And at the moment, there are more than enough jobs to go around.

"The way Montana is blooming right now, not everybody can do all the work, so there's more work out there," he said. "The JTLs or whoever else can't take every single job."

Schellinger Construction recently won a $10.7 million contract with the Montana Department of Transportation to work on a section of U.S. 93 North.

The company will transform a 3.7-mile stretch of highway north of Majestic Valley Arena into a four-lane highway.

Schellinger currently has projects all over the state and one in Coeur d'Alene, Idaho.

Four projects are more than $10 million. In the valley, it has one $4 million project and a few over $1 million. Schellinger estimates the company has another 10 projects in the $50,000 to $500,000 range.

"We're definitely getting full. I couldn't add another one to the fire," he said. "We're definitely looking pretty good as far as the amount of work."

And the Schellingers intend to continue that work as a locally owned business, despite multiple offers from larger companies.

"There's literally probably 20 a year," Schellinger said. "How many of them are really legit offers, I don't know, but we have no intent whatsoever" to sell.

Liz Marchi, president of Montana West Economic Development, said local ownership will continue to be the rule in the Flathead for a few years at least.

"One of the dynamics is most of our companies are very small," she said. "They're not really at a sales or critical mass size for another company to come into."

Companies want to buy businesses that have reached a certain sales benchmark, she said; a company that has reached $25 million in sales might be a good candidate for acquisition.

"Is it a trend in our local economy? I would not say so," she said. "We just don't have a lot of businesses that are at that level of sales."

"I think we'll see more of that down the road, but I don't think we're quite there yet," she added.

Reporter Kristi Albertson may be reached at 758-4438 or by e-mail at kalbertson@dailyinterlake.com.