Sealaska Corp. continues search for the right business fit
JUNEAU — Sealaska’s land acquisition will help its timber business and the Southeast Alaska Native corporation is looking to expand in other sectors as well.
Sealaska Corp. President and CEO Anthony Mallott said in an interview that the corporation has a team continuing to pursue business purchase options, with the hope of announcing something significant within six to 12 months.
The focus is first and foremost on industries Sealaska knows well, Mallott said. From there, an emphasis is being placed on operations with high cash flow and those that have ties to Alaska, or at least the Pacific Northwest.
“If it’s not in the state, it should have an opportunity to reach to the state,” he said.
Sealaska currently has four government services firms that specialize in the environmental, technical, IT and construction and project management sectors. Alaska Coastal Aggregates and Sealaksa Timber round out its natural resource subsidiaries.
The acquisition team is working with patience and discipline Mallott said, meaning a new business purchase could take longer than a year.
Mallott announced last year that his corporation would enter acquisition mode after selling off companies it owned based all over the Lower 48 and Mexico.
Owning firms headquartered outside Alaska is common among the state’s 12 Native regional corporations.
He noted that Sealaska is hunting for new business with significant capital on hand. At the end of 2013 the corporation held $80.2 million of cash and investments and had more than $121 million in liquid capital and credit, according to its annual financial report.
Mallott stressed Sealaska will develop a “network of trust” to fully understand the risks in whatever venture it enters on his watch and avoid past mistakes.
“Historically, we’ve purchased assets within industries that we didn’t have a full understanding of and it’s led to issues, so the learning and gaining experience and creating a network of folks that work within different industries, that’s going to be the key in getting a deal done sooner rather than later,” Mallott said. “And that’s what we’ve been doing the last year and a half.”
The 2013 Sealaska Annual Report also detailed a very rough year. Sealaska posted a $35 million net loss that year. Without natural resource revenue sharing from the other Native regional corporations, the final losses would’ve been much worse — $52.2 million in operational losses.
Chris McNeil Jr., president and CEO at the time, attributed the losses primarily to one of its construction firm’s losses that offset profits in other businesses. Combined with an internal restructuring that touches many branches of the corporation, Mallott said the acquisition, when it comes, will be a “turnaround moment” for Sealaska.
“When you think about the want to be around 100 years from now, let alone 500 years from now — all those structural things you need to be sure of and we think now is the right time,” he said. “We’re doing both; we’re actively looking and we’re structurally improving Sealaska.”
Elwood Brehmer can be reached at [email protected].