From his office in the IDS Center, where he oversees a diverse group of companies that include recreational boats, close-out trading firms, and Watkins, a purveyor of specialty foods and over-the-counter remedies, Irwin Jacobs shrugs off both the positive and the negative characterizations that others have made of him. He’s been called a shareholders’ defender and a corporate predator. Both, he says, are “probably true.” But asked how he views himself, it’s as “a peddler—like father, like son. It’s who I am.”
That father was Samuel Jacobs, a Russian immigrant who came to Minneapolis in 1911. “There’s no question my dad, who treated me like an adult early on, gave me the strength, foresight, and confidence to grow more quickly than most young people,” says Irwin Jacobs.
By age 12, he was working with his father, selling gunny sacks full of grain. Soon he had exchanged grain bags for sandbags, selling them to flood-prone towns throughout the Upper Midwest. “The road was a great teacher,” he recalls, “with countless opportunities.” One of those opportunities was liquidating insurance salvage yards, a business he entered in the late 1960s as a partner with his brother-in-law in Kwantra National, Inc. he went on to find a niche retailing close-out merchandise through companies including C.O.M.B. and Jacobs Trading.
In 1975, however, Jacobs was looking in another direction. He was set to buy the Grain Belt Brewery on the Minneapolis riverfront, but needed $4.6 million in financing. Enter Carl Pohlad of Marquette Bank, whose backing brought instant credibility. “Unfortunately, it was a time when the Budweisers of the world were taking over,” says Jacobs. “There was little hope for a regional brewery, and the cost of doing business was too high.” He sold out in 1989 to G. Heileman Brewing Company of La Crosse, Wisconsin, which bought the brand name for $5 million and left him the real estate assets.
Jacobs and Pohlad developed a close working partnership that has lasted to this day. “Carl gave me my first real change,” Jacobs says. “I’ll never forget what he did for me, and I’ll be there for him forever.”
During the 1980s, with a glut of mergers and acquisitions on Wall Street, Jacobs earned a reputation as a corporate raider and was dubbed “Irv the Liquidator” by The Wall Street Journal. With Pohlad as a partner and with financing at times from then-First Bank, Jacobs took major stock positions in companies such as Disney and ITT. He also purchased financially troubled companies—sometimes just their assets—including dime-store chain W.T. Grant, bowling equipment maker AMF, boat manufacturer Aegis, snowmobile maker Minnstar, and Lund Boat Company.
Jacobs doesn’t dispute that he carried out unfriendly takeovers that caused management and employee dislocations nationwide. But he believes they led to increased management accountability. Executives at these “inefficiently run fiefdoms disguised as public companies,” were forced to make shareholder value a top priority, says Jacobs.
By the early ’90s, Jacobs had played a role in unveiling and, more important, unlocking shareholder value. And through his acquisitions, he had established himself as a mainstream financier. “I had proven myself to myself,” he says, “and was ready for a new challenge.”
The Lund Boat Company, which he had acquired in 1978 and brought under the Genmar Holdings umbrella, became Jacobs’ primary focus. Both the businesses and the industry were stagnant and lacked sophistication in distribution and standards in manufacturing, he says. On top of that, the boat building process was time-consuming and hazardous to the environment.
Jacobs applied his marketing and business development savvy, acquiring Operation Bass, now FLW Outdoors, in 1995, a Kentucky business that published fishing magazines and organized more than 170 professional fishing tournaments each year. He made Wal-Mart his title partner for tournaments, and attracted 36 other major business names, from Land O’Lakes to Chevrolet, as sponsors.
In 2000, he made another acquisition that would allow a quantum leap in growth for Genmar. He bought a digital boat-manufacturing company in Little Falls that had developed a technology called “virtual engineering composites,” or VEC, a new fiberglass molding system that dramatically sped up the hull-building process. “What the computer did for the world, VEC will do for boating,” Jacobs says. “It will be game changing.”
Then in March last year, Jacobs made a buy that seemed to clinch Genmar’s future, acquiring six former brands of bankrupt Illinois manufacturer Outboard Marine Corporation. The deal made Genmar the world’s largest builder of recreational boats. Genmar has surpassed $1 billion in sales and has more than 7,000 employees.
How does Jacobs juggle several successful businesses? “God has given me an ability to switch gears very quickly, yet remain focused,” he says. “Besides, most people run away from problems, I seek them out. This keeps me young.”
Timeline
1941 – Born in Minneapolis.
1953 – Sells gunny sacks of grain with his father, Samuel Jacobs.
1960s – Starts Kwantra International with his brother-in-law, liquidating insurance salvage yards.
1975 – Acquires Grainbelt Brewery.
1978 – Purchases Lund Boating Company.
1980s – Acquires a string of companies, including W. T. Grant, AMF, Aegis, and Minnstar.
1989 – Sells Grainbelt Brewery.
1995 – Buys Operation Bass, now FLW Outdoors, which publishes fishing magazines and organizes fishing tournaments.
