Choggiung Makes a Striking 49er Debut

The Acquisition

While Poindexter and the board were in the midst of focusing on growth opportunities, BBNC approached them with an incredible opportunity to invest in the Bristol Alliance of Companies, a group of ten companies that provide construction, environmental, and professional services. Poindexter explains, “It ended up actually being a competition between multiple villages in Bristol Bay; BBNC offered this opportunity to a lot of villages and in the end selected Choggiung to be the sole investor and business partner in Bristol Industries [the holding company that wholly owns the Bristol Alliance of Companies].” Not only is Choggiung the only investing partner, it is now the majority owner of the Bristol Alliance of Companies, while BBNC maintains a minority share.

The acquisition and partnership is groundbreaking in several ways. “I don’t know of any other regional corporation working with a village corporation like BBNC is working with theirs,” Poindexter says. “I want to give an enormous amount of credit to Bristol Bay Native Corporation and their vision for lifting other organizations in its own region… it’s something I don’t think we’ve seen amongst Alaska Native corporations.”

In addition, many of the companies in the group are part of the Small Business Administration’s 8(a) program, “so this required significant effort for getting approval from the SBA to transfer the ownership interest—we are the very first to acquire controlling interest in already operating assets participating in the 8(a) program from another Alaska Native corporation… truly it is the first of its kind,” Poindexter says.

At the time the acquisition was announced, BBNC President and CEO Jason Metrokin said in a statement, “We are confident the Bristol Alliance of Companies have a bright future ahead under Choggiung’s leadership. BBNC looks forward to continuing our work to identify unique economic development opportunities in Bristol Bay.”

The sale closed in August 2018, about one year after Poindexter joined the company: “It has been a whirlwind,” he says. “This acquisition opportunity sort of stretched the minds of everybody in the organization because in FY2017 our revenue was about $8.4 million, and so it took a lot of imagination for us to wrap our heads around going from being an $8 million company to a $100 million company overnight.”

A Broad Portfolio

Since the acquisition, Choggiung has continued to gain momentum. The corporation now has contracts with the federal government in several states, including one with the US Marine Corps, which Poindexter says is the first sole-source contract that Choggiung secured. “It’s interesting for us because it has ties to village life, and the board is excited about it because they can relate to the work,” he says. The contract was initially to repair and maintain ATVs and grew to include motorcycle maintenance and repair and now Humvee radiation maintenance and repair.

Last year was also a good year for Choggiung’s wholly-owned Inland Empire Fire Protection, which is located in Spokane, Washington, and provides fire protection services. “That company had a significant number of large projects, and it had never had contracts of that size before, and so it exceeded all of the revenue expectations that we had for that year and remains a strong performer in our portfolio.”

Before the acquisition, a significant line of revenue for Choggiung was commercial real estate, primarily assets in Dillingham (which also saw an increase in revenue last year); its major tenants include state and federal government entities. Locally, the company also owns a hotel (the only traditional hotel in Dillingham) and a diner, and those operations remain important as they provide job opportunities in the region for the corporation’s shareholders.

Choggiung has a management agreement with BBNC in the region for a gravel resource located close to the village corporation’s headquarters. Choggiung has the surface rights to the area, but BBNC, as the regional corporation, has rights to the subsurface assets, which includes mining operations. “So we manage the resource for them and share in the royalty sales from that,” Poindexter explains.

So even with its sights set on a bigger picture, Choggiung also remains laser-focused on home. “As I’ve discussed the future with our leadership and board members, Dillingham is our home and we want to remain invested there, and it’s important to do a good job for our community… and we remain centralized in Dillingham. In fact, I’m the only parent company employee that lives and works in Anchorage.”

A significant acquisition of a well-respected group of companies and the high performance of Choggiung’s existing subsidiaries and partnerships has clearly built optimism among the company’s management team and board. “The board feels confident, almost invincible,” Poindexter says. “But it will take a couple of years for our cash flow to catch up and for us to continue to build our financial strength—[the acquisition] wasn’t given to us for free.”

The Courage to Find Success

However, the acquisition has allowed the board of directors to open discussions—for the very first time in the corporation’s history—to implement a dividend policy to pay predictable and ever increasing dividends to its shareholders. “That means we always have to grow,” Poindexter says, “but that is a commitment that we’ve made to our shareholders.” Choggiung was able to pay out its first dividend in 2018 under the new dividend policy, and another, larger dividend was distributed earlier this year, meaning that to-date that commitment is being met.

Courage is one of the corporation’s core values, and Poindexter is quick to point out the courage it took on the part of the board and the company’s shareholders to take such a significant step, though he wasn’t surprised to find that courage among his people. “We’re in a remote area and our people have the ability to adapt in a very quick form to be able to take advantage of the opportunity in front of them. So if your hydraulic pump breaks on your boat, there might not be a service provider to fix that for you, and our people have developed the adaptability and skill set to be able to repair and overcome any sort of challenge. It’s that grit, that determination, that quick thinking that is ingrained in our people’s culture and is carried on through the people in our corporate office and executive team.”

In fact, every member of Choggiung’s corporate executive team is a shareholder. “So we all have a very similar value set in terms of care for the corporation and interest in doing the very best job that we possibly can do,” he says.

Poindexter joined the company at a unique moment in its history and is undoubtedly a key factor in the positive direction Choggiung is moving. “I have to give a lot of credit to the team, because when I came in it was probably like whiplash for everybody,” he says. “It was a totally different set of expectations and vision of the future. But—and I have no idea why or how—the crew I inherited were all craving some sort of change and were excited to be able to go down a path of faster growth. There was a hunger for that type of change; though now, two years later, they’re probably exhausted,” he laughs. “I’m ready for a more relaxed pace, but I think the momentum is just going to keep picking up.”

Poindexter continues, “Our organization wants to inspire our employees, our shareholders, and our customers with our vision, which is very simple: it’s to grow, preserve, and give without boundaries.”