Maine families had owned each business for over a century, selling two essentials to generations of customers. The destiny of each now belongs to out-of-state owners.
Two family-owned businesses that originated in the Bangor area — ice manufacturer Getchell Brothers and the fuel firm Dead River Company — were both sold to out-of-state owners this year based in the Philadelphia and Baltimore areas, respectively, in deals that indicate an increasingly nationalizing economy seeing significant consolidation.
Both companies say the buyers will continue operations in the state. But it is what the new owners, Arctic Glacier and Redwood Capital Investments, do next that will decide the effects of the sales on Maine’s economy.
Getchell began 133 years ago when ice was harvested from the Penobscot River. Doug Farnham, the company’s longtime president, said the industry had simply changed. Buyers were less often mom-and-pop outlets that Getchell had long dealt with, but larger chains like Walmart, Hannaford and Circle K, he said. Those companies are likely to buy from national suppliers.
“We’re a distributor of food products that go to stores and supermarkets,” Farnham said. “There’s been tremendous consolidation in all those areas.”
Ice products will continue to be manufactured in Bangor and Sanford, but the Getchell Bros. bags sold across Maine and the rest of New England will eventually have Arctic Glacier labels.
In a state with a strong local identity, some may recoil that companies owned and operated in Maine for generations could be transferred to out-of-state ownership. But the repercussions of these acquisitions can vary depending on what the buyer does after the sale, said Jason Harkins, a professor and associate dean at the University of Maine Business School.
The effects often depend on whether the new owners choose to keep operations within the state, Harkins said – downsizing or pulling out of the entity’s home state can take away jobs that may be difficult to replace.
There has been a steady stream of Maine companies purchased by larger out-of-state companies over the last decade, Harkins said. Those types of transactions were interrupted by the COVID-19 pandemic in 2020 but seemed to resume as some normality set in this year.
The number of sales tend to depend on the industry: Newer, innovating industries tend not to combine as they compete for growth in emerging markets, but industries that are not seeing that level of upheaval tend to consolidate, Harkins said.
“Once the market kind of matures and stabilizes, and the business model’s pretty well-known, they tend to move toward a concentrated set of winners with a relatively high percentage of the market,” Harkins said.
Right now, there is also a particularly strong climate for acquisitions, Harkins said. Despite the pandemic, many large companies are seeing influxes of cash. Banks also have a lot of money to lend due to current policies of the Federal Reserve.
Across the country, many family-owned companies, particularly those run by people of the baby-boomer generation, sold in recent years, Harkins said. Those deals often net significant amounts of money for families that have lost interest in controlling their long-held businesses.
Farnham, who has also served as the adjutant general of the Maine National Guard since 2016, said the fact that he was nearing retirement age was a factor in the decision to sell Getchell.
Dead River Company has been owned by the descendants of founder Charle Hutchins since it was founded in 1909. But now, the three living generations of owners “had diverse interests and priorities” and were spread out across the country, spokesperson Lisa Morrissette said.
In private equity firm Redwood Capital Investments, the family found a buyer that aligned with its values and with whom they could entrust with the company’s future, she said. The firm owns several other propane and fuel companies across the country.
The sale of the company comes as Maine and the rest of the nation seeks to decrease reliance on fossil fuels and move toward renewable energy. But Morrissette said those efforts had not played a role in the sale, which she said would not change Dead River’s operations.
“We continue to operate, as we have been, with the same great team of people, under the same brand name,” Morrissette said. “In other words, nothing has changed.”
Getchell and Dead River are far from the first Maine companies to be sold to larger, out-of-state entities. Poland Spring was sold to Perrier in 1980 and was acquired by Nestle in 1992. Nestle then sold it to two private equity firms earlier this year. Bath Iron Works, at the time Maine’s largest private employer, sold to General Dynamics in 1995. Hannaford Supermarkets sold in 2000 to Netherlands-based Delhaize Group, now known as Ahold Delhaize.
Each of those companies continued to employ numerous people within Maine, though a larger percentage of profits is undoubtedly going outside of the state’s borders than before.
As he unloads operations to a new owner, Farnham noted that the decision to sell required both economic and emotional considerations. He said he was most appreciative of the company’s customers, including the many stores who chose to sell Getchell ice.
“It was emotional, but I also felt like it was the right thing to do,” Farnham said, “the right time for it in such a changing world.”