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  • Jul 7, 2022

    American Dream Achieved

    IBA, as an approximately fifty-year old business brokerage firm serving the entrepreneurial community of the Pacific Northwest, has been uniquely positioned since before the American Bicentennial celebration of 1976 to witness and hear the stories of thousands of people who have lived the American dream through entrepreneurship creating beloved businesses by employees, customers, and communities while finding personal fulfillment and financial prosperity through execution of their ideas, hard work, perseverance, and ability.  In an effort to share these stories heard throughout the years by our team of business brokers, who are commonly regarded as the “best listeners” in the M&A industry, IBA has retained highly regarded writer, Nesha Ruther, to tell their stories.  It is our goal to share one story a month. It is our hope that you will find the stories as inspirational and motivational as they are to us and the buyers who bought the businesses in IBA facilitated transactions in Washington, Oregon, and Alaska.

    The Story of Ann Bailey (EcoChem)

    By Nesha Ruther

    When Ann Bailey graduated from the University of Oregon with a degree in Biology, she wasn’t sure what she wanted to do. It was 1972, few women graduated with degrees in the sciences, and unemployment was over 12%. Jobs in the Northwest were incredibly hard to come by. She decided to take a year and work as a waitress while she figured out what she felt called to do. Ann enjoyed her waitressing job, “I learned a lot about the general public and about myself,” she says. But there were greater and greener pastures waiting for her.

    In 1970, the United States government formed the Environmental Protection Agency (EPA). That same year, Earth Day was created. There was a new industry emerging called environmental science. Ann, who had grown up with a deep love for the natural world and had her background in biology, took an immediate interest. “There were no [environmental sciences] graduate programs on the West Coast at that time. They were all specific disciplines e.g. ecology, animal physiology, or botany. There was nothing interdisciplinary that I could find, except at the University of Montana.”

    The year prior, a professor at the University of Montana had started an environmental studies program that integrated biology, chemistry, geology, economics, and forestry. It was a broad-based program that allowed students to hone in on their interests while still cultivating a well-rounded body of knowledge. Ann decided to apply to graduate school.

    After graduating from the University of Montana, Ann returned to the Northwest to seek a job, but there were no environmental consulting firms. “Nobody knew how to talk to an environmental scientist; people really didn’t know what that meant,” Ann said. She ended up finding work at a laboratory where she did sample analysis for a wide range of environmental investigations. This work was mostly contracted by engineers rather than scientists. Ann soon realized that her environmental science background specifically equipped her to assist with determining the best sampling and analysis procedures and conduct overall quality control/quality assurance of data sets in a way others were not.

    In the 1970s, the industry was so new it was like the Wild West. “At the time it was all engineering firms, maybe they’d have a biologist or a chemist, but there were very few people who had general environmental science degrees because they just didn’t exist.” Ann knew she had a valuable opportunity on her hands, and in 1983 decided to start her own firm giving the quality assurance that only an environmental scientist could.

    Ann was a woman in a male dominated industry in the 80s, at a time where female scientists were few and far between. “When I started my business, there was an initiative in Washington where 5% of any large project had to go to a woman-owned business. That’s how I got introduced to many companies.”

    Ann began by supporting environmental investigations in Washington. Most of these cases were Superfund sites, where toxic chemicals had been dumped for years and were only now receiving the funds and attention needed to investigate the damage and perform clean-up. The Superfund sites were areas where manufacturing facilities (e.g., producers of airplanes, paper, or aluminum) had disposed of a wide variety of toxic materials.

    Ann’s company, EcoChem, was hired by engineering firms to help them set up sampling and analysis plans specific to each contaminated site, as well as provide quality assurance project plans for the data collection.  Suddenly, EcoChem found a niche in the environmental world for ensuring that data was  gathered, used, and interpreted correctly.

    In the early 1990s, EcoChem was contracted by NOAA, the National Oceanographic and Atmospheric Administration, to oversee data collection for a large scientific investigation into the historical contamination from DDT manufacturing in southern California. These studies involved scientists throughout the US, and Ann, based on reviews by EcoChem staff, was responsible for testifying in court to the validity of the data sets collected. In 2001 the lawsuit was successful and the parties paid over $73 million for restoration work. As a result, NOAA continued to contract with EcoChem for a number of different natural resource investigations across the US.

    Then, in April 2010 an oil spill occurred in the Gulf of Mexico. This proved a particularly meaningful case for Ann’s business. She had been talking to various brokers about selling her business, but many were concerned that the company was too small to sell. She had fewer than 20 employees at the time, and transaction costs were high. Many large firms were not interested in incorporating such a small group.

    Working on the Gulf of Mexico oil spill changed everything. The oil spill consisted of more than 200 million gallons of crude oil escaping into the Gulf of Mexico for a total of 87 days, making it the biggest oil spill in U.S. history. 16,000 miles of coastline were affected, including the coasts of Texas, Louisiana, Mississippi, Alabama, and Florida. The urgency was so great that NOAA needed work done right away.

    Ann and her team rushed to pull together an analytical program for NOAA to monitor the oil spill. EcoChem worked with both NOAA and the oil company (BP) to set up an acceptable analytical program so the same dataset could be used by both the government and industry for assessing the oil spill effects. Dozens of laboratories and hundreds of scientists were involved, with EcoChem providing the oversight. It was a multi-million-dollar contract.

    EcoChem occupied an interesting position as consultants for both industry and government organizations depending on what the case required. When the oil spill occurred in the Gulf of Mexico, they worked as auditors for both. “We did a lot of data validation, we did a lot of review of the data that’s behind investigations, so that people can have assurance that it was really well investigated, or the testing was done properly.” Ann and her team served as the critical neutral party between industry and the government. “We would look at all the raw data from instruments and produce an audit trail for exactly how that data was produced,” she says.

    “This is all very tedious, intense work,” Ann says, “but it’s critical to knowing that it’s good data.”

    Ann’s position provided a vital service because of how easy it is to bias data simply by the manner of testing. In the aftermath of an environmental disaster like an oil spill, the government will bring in data that supports environmental restitution, while the corporation will present data that minimizes their liability. EcoChem’s neutrality allowed her to determine which data was accurate and which was not. “You have to have somebody come in and say, “Well this is good data. This is bad, poor data,” Ann says.

    While the need for reliable data has remained constant over the years, the manner in which data validation occurs has changed massively since Ann began her business. “When we first started in the ‘80s, we would get banker boxes of data and instrument print outs. We would have to sort through, sometimes two or three inches of paper for just one sample. We’d have storage areas for all these banker boxes of data.”

    As technology improved, so too did the efficiency with which EcoChem could receive and validate data, switching from banker boxes to CDs, and eventually to flash drives that containing all the necessary documentation for a specific case. Before long though, every employee had their own personal computer and they had to purchase a large server to store their data. “In the ‘90s we had to keep upgrading every few years and getting new computers and servers.”

    Ann recalls one instance in which she told their computer equipment vendor that she wished equipment would last longer before having to upgrade it. He asserted that the server EcoChem was purchasing at that time was going to last forever because it had the capacity for a whole gigabyte of data storage. “At the time that sounded like so much,” Ann says, laughing.

    Early on, Ann used to spend her evenings going from library to library on the University of Washington’s campus to track down relevant information. “I’d have to go to all of these different physical spaces to look at physical information,” Ann says.  Later, she was able to use the inter-library loan system to access the resources EcoChem needed. That method too, eventually was replaced in favor of Google. “Google revolutionized our ability to get information and do research.”

    “You could also use Google Maps and look at photos from historical times and compare it to current satellite photos.” These resources significantly increased Ann’s ability to assess environmental degradation over time.

    With changing technology came changing needs in employee expertise. “Initially we had word processors that would type the reports, then chemists had their own computers and would be the ones inputting information, we no longer had employees that purely did report writing,” Ann says. “As databases became more important, we needed people who could use and build databases.” Being able to adjust their systems to meet the changing demands of the industry was one thing that made EcoChem successful.

    As important as it is to adapt however, one strategy of Ann’s was to not adapt too quickly, or pursue the newest, flashiest piece of technology. “One thing we found was that we didn’t want to be leading in the technology arena, because we are not a technology company. We wanted to use established technology, not getting too far in front,” Ann says.

    The latest technology may go under and become obsolete, rendering the investment worthless. It also may become more established, and therefore reduce in price later on. Ann remembers one instance in which a scientist wanted a cutting-edge flat screen monitor for $5,000. Two years later, the same monitor was priced at $200.

    “It was always a balancing act of utilizing the best software that was out there, while also reminding ourselves that we are not a technology company,” she says.

    While the internet and changing technology gave rise to greater access to accurate information, it also gave rise to more misinformation. “The accessibility and ability to produce a lot of information doesn’t necessarily mean you get better information. It’s easier to have misinformation out there.”

    Thus, the rise of available information through the internet has created an even greater need for data auditing and third-party validation, making EcoChem’s work even more critical. “When you have really involved work, it helps to have someone say “Yes, this was done properly.””

    Another aspect of EcoChem’s work that kept things interesting was the constantly changing nature of the science. Every few years a new chemical becomes the industry’s main point of focus as they learned more about harmful materials. “Every five years there was a new chemical of issue. Initially we did a lot of work with concerns around polychlorinated biphenyls (PCBs), then it was dioxins, and always there were various pesticides of concern.” The addition of new chemicals of concern continues, so the priorities of environmental science are ever changing.

    As someone whose job consists of coming in after a catastrophe, Ann knows better than most that some disasters simply cannot be fixed. “When you look at contamination in the wetlands, there’s no way to get all that contamination out. NOAA’s answer to that is rather than spend money on something that can’t be fixed, to find an area to preserve and restore.”

    Ann is grateful for NOAA’s efforts and agrees with the approach, but wishes the public were more aware of how many environmental ecosystems have been permanently damaged. “Some of it is beyond science. There is only so much you can do sometimes. I’m hoping there’ll be more integration of understanding our relationship with nature and how we can best preserve what we have,” she says.

    Despite the rapidly changing world we live in, the need for data validation remains prominent. “We found something that was hard, that most companies found tedious to deal with, and we systematized it. Early on, we found a way to efficiently go through and review all the banker boxes of data. As the technology changed, we found ways to electronically deal with the mountains of data that were coming in.”

    While EcoChem’s systems were flexible enough to adapt, their niche remained constant. “It was difficult for companies to process all of this information; we found a little niche that nobody really wanted to deal with. It was not the glamorous part of environmental science,” Ann says.

    When it comes to business, EcoChem’s longevity proves grit can often outlast glamour. “People weren’t used to having somebody look over their shoulder like that,” Ann says. “But it became necessary because they weren’t calibrating their instruments properly, they weren’t being systematic in how they were doing things.”

    Ann sold EcoChem in 2012 and retired in 2014. These days she spends her time engaging in the natural world in different ways. She is an avid horseback rider, learning to ride in her 40s while she was still working. She owns two horses, JB and Buster. Gentle Buster, who she just retired, will be helping teach children how to ride.

    Ann had spoken to several brokers in the process of selling her business but struggled to find someone who understood her industry. One of her friends was a cousin of Gregory Kovsky and connected her with IBA. “He was amazing. He asked all the right questions and seemed really interested in us,” she says, “What impressed me was that he worked with smaller companies, and knew how to find an exit strategy for a closely held company.”

    Rather than viewing the size of EcoChem as a limiting factor, Gregory saw it as an opportunity. He took the time to understand the industry and give Ann all the information she needed to make the best decision for her and her business. “Other business brokers didn’t take the time to really understand what value EcoChem had.” Ann says.

    Ann wanted the buyer to be someone who would keep the talent intact and would allow her employees to stay and feel good about where they were. She also wanted to make sure her legacy was in a company that would continue to grow the work she had started.

    Gregory and IBA even went so far as to find a woman-owned business to be the buyer, an environmental engineer that focused on ecological studies.

    Ann recommends that any small businesses looking to sell, particularly those in niche industries like environmental science, take the time to find a broker that really listens and understands their concerns and priorities. “I was burned out and needed to find an exit. Gregory knew the Northwest well and understood the business climate.”

    “I had no idea how to sell a company, that wasn’t my expertise. You need somebody that understands what is of value in your company and can hone in on that and say, “This is what you’re selling. And this is how you’re going to be able to get the amount of money you need to retire.”

    After 30 years of work, IBA was able to help Ann sell her business and move on to the next chapter of her life. Ann embodies the American Dream Achieved, not only through her success as a business owner, but her commitment to environmental science ensuring our country is one where people can continue to live and succeed for generations to come.

     

    Nesha Ruther

    Nesha Ruther is a writer and editor from Takoma Park, Maryland. She received her BA in English Creative Writing from the University of Wisconsin Madison, where she received a full tuition scholarship through the First Wave program based on academic and creative merits. She was a 2016 Young Arts winner in spoken word, a 2016 winner of the DC Commission of the Arts Larry Neal Writing Award, a 2017 winner of the Mochila Review Writing Award, which was judged by Nikki Giovanni, a 2020 winner of the University of Wisconsin’s Eudora Welty Fiction Thesis Award, and a 2022 Tin House Winter Workshop Participant. She has been commissioned to write and perform for the National Education Association, and has had work published in NarrativeNortheast, Angles Literary Magazine, Beltway Quarterly and more. She currently lives in Cincinnati Ohio and is the Lead Manuscript Developer at Holon Publishing and Collective Press.

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