More Private, Less Public

Contrarians can find exceptions to the rule. When Norwest Corporation acquired Wells Fargo in 1998 and put the latter name on the combined operation, the headquarters went to San Francisco. Deep job cuts in the Twin Cities were expected to follow. Instead, the company added thousands of workers here.

And some Minnesota companies have figured out how to access capital and grow without being public. Consider Cargill, which has become the country’s second-largest privately held corporation and a global juggernaut. (It also created a successful public company with headquarters in the Twin Cities. Plymouth-based fertilizer manufacturer Mosaic [NYSE: MOS] is the product of a 2004 deal in which a Cargill division merged with publicly held IMC Global. Mosaic was the nation’s best-performing large-capitalization stock last year.)

A sell-the-company mindset often means less attention to building a company that can compete for the long haul.

Corporations in Minnesota’s unusually hefty contingent of Fortune 500 entries have mostly survived the recent wave of M&A activity. These companies, with more employees, shareholders, and customers, mean more to the local economy than do the midsize and smaller businesses recently departing.

On the other hand, the Fortune 500 companies used to be midsize and smaller, too.

Who’s Filling the Pipeline?

Minnesota’s public company decline seems symptomatic of other problems. One is that early-stage financing from local banks and investment firms is not what it once was.

Tom Holloran was Medtronic’s attorney in its early years, and served on the company’s board for four decades. He says Medtronic wouldn’t have survived but for the initial financing it got from a neighborhood bank—Northwestern National on Central Avenue in Northeast Minneapolis.