It’s not nothing when a homegrown Fortune 100 company decides that its top executives need to be elsewhere, even if, as Raytheon said, the local employee headcount won’t change. More important, the Raytheon news — coming two years after United Technologies bought the Massachusetts company and appropriated its name and headquarters — was a reminder that when change is the only constant in businesses, it can be instructive to remember where we’ve been to understand what may lie ahead.
This chart shows the 10 biggest local companies ranked by stock market value 30 years ago (May 15,1992, chosen because it was the cutoff used in that year’s Globe 100 special business section) and as of the close of regular trading on Monday, after a brutal selloff.
Keep in mind that publicly traded companies don’t represent the full breadth of the region’s commercial life.
Besides the mom-and-pop and small businesses that are the backbone of the economy, there are many touchstone employers — hospitals and health insurers, investment firms, universities — that are nonprofits or privately owned. Institutions such as Mass General Brigham, Blue Cross Blue Shield of Massachusetts, Fidelity Investments, and Harvard and MIT — just to name a few — have played an increasingly pivotal role in the vibrancy of the Massachusetts economy. But for the purposes of this column, let’s focus on companies whose success and failures are reflected daily in the price of their stock.
For starters, it may be obvious to longtime followers of the local business scene that State Street (it dropped “Boston” from its name in 1997) stands out among the 1992 crowd. It’s the only company that hasn’t been acquired.
Of the next 10 companies on the 1992 list, just three — TJX, Thermo Fisher Scientific, and PTC — remain publicly traded today, and each has excelled in its field. Polaroid went bankrupt, and the rest — Stride Rite, Boston Edison, Millipore, Stratus Computer, Genzyme, and Critical Care America — ended up becoming part of others companies.
The big picture is clear: The Massachusetts economy has thrived over the past three decades even as the corporate landscape was continually reshaped by the rise of new industries, the demise of others, and relentless mergers and acquisitions. Some call it creative destruction, others may prefer winner-takes-all capitalism. Either way, digging through the archives, these are among the lessons that emerge.
Industry consolidation has claimed many of the region’s best-known companies.
Gillette, the famed razor maker, was still the state’s most valuable company in early 2005 when it agreed to be acquired by Procter & Gamble. The deal, valued at $58 billion, ended more than a century of local control. The company’s World Shaving Headquarters stayed in South Boston, but Gillette’s Massachusetts workforce is substantially smaller than it was before the takeover.
Another 2005 vintage deal was Adidas’s $3.8 billion purchase of Reebok, the sneaker and athletic apparel maker then based in Canton. Reebok had made an impressive comeback after falling out of fashion with consumers, and Adidas saw the company as a way to more aggressively compete against industry giant Nike. The relationship lasted until last year, when Adidas unloaded Reebok, which had been dragging down its profits.
While Reebok reported to Adidas headquarters in Germany, Brighton-based New Balance, a privately held company, blossomed. And the state has become something of a shoe-design and marketing hub. Brands including Converse, Saucony, and Stride Rite operate locally, though their owners are elsewhere.
Banks went on a furious M&A spree during the 1990s. Shawmut National was acquired by Fleet Financial Group in 1995. Fleet bought the renamed BankBoston four years later. Fleet, which inherited naming rights to the new Boston Garden when it purchased Shawmut, was later subsumed by Bank of America. Ironically, Bank of America is now led by Brian Moynihan, originally a Fleet executive who has remained in Boston. There are still plenty of banks around, including outposts of the national giants, regionals like Providence-based Citizens, and local independents including Eastern Bank and Rockland Trust.
Utilities have been combining since the days of Thomas Edison. Boston Edison, about as quintessential a local company as we’ve ever had, merged with Commonwealth Energy System in 1999 to form NSTAR. Northeast Utilities later bought NSTAR, just one of its many acquisitions, and then rebranded as Eversource. Meanwhile, New England Electric was gobbled up by National Grid, a UK-based company that consolidated its way into being a major electric and gas supplier in New England and New York.
Staying on top in tech is hard, very hard.
A key driver of the so-called Massachusetts Miracle — the 1980s revitalization and expansion of the local economy — was the minicomputer, a forerunner of today’s servers that are the backbone of the Internet. But by 1992, the state’s minicomputer makers were on the wrong side of the personal computer revolution.
In mid-May of that year, Digital Equipment’s stock price was down 78 percent from its 1987 peak, though it remained the state’s third most valuable company. Shares of Wang Laboratories and Data General were also battered. By 1999 all three companies had been snapped up at fire-sale prices; Data General was bought by EMC Corp., a Hopkinton company that had barely made the top 50 of local publicly traded companies in 1992. (Footnote: EMC, which makes data storage systems, went on to become enormously successful itself — until Dell swooped in and agreed to buy it for $63 billion in 2015.)
In contrast, Lotus Development surfed the PC wave, with its Lotus 1-2-3 spreadsheet becoming one of the first killer apps for desktop machines. But the Cambridge company struggled to come up with another blockbuster. IBM bought it in 1995.
Nonetheless, some tech companies have been remarkably durable. Analog Devices was founded in 1965, and the maker of signal processing circuits used in everything from cars to cellphones to video games has persevered through good times and bad. The Wilmington company has a market value of $77 billion. Similarly, Teradyne, a maker of semiconductor test equipment, was founded in 1960 and has survived the brutal ups and downs of the chip industry ever since. Shares of the North Reading company have returned an average of 13 percent a year over the past 30 years, outpacing the Standard & Poor’s 500 index.
While Massachusetts no longer has a dominant tech giant like Digital Equipment, local entrepreneurs have launched a steady stream of innovative companies. Among them: Akamai, HubSpot, Rapid7, Toast, TripAdvisor, and Wayfair.
Biotechnology delivered on its promise.
Thirty years ago, biotech was heavy on potential, light on profits. There were three biotechs among the top 100 publicly traded companies in the state: Genzyme, Biogen, and Cambridge Biotech. Their stories illustrate the payoffs and pitfalls of the industry.
Genzyme was early to game, formed in 1981 to buy biotech businesses. Its initial blockbuster was a drug to treat Gaucher disease, a rare genetic disorder, and it expanded steadily until it was acquired by Sanofi for $19 billion in 2011.
Cambridge Biotech, which was started to pursue vaccines for HIV, Lyme disease, and other diseases, never got off the ground and went bankrupt in 1994.
And Biogen became the most valuable biotech in the state on the strength of its multiple sclerosis and spinal muscular atrophy treatments — until it was surpassed by Vertex and Moderna. Biogen was dealt a major setback last year when insurers, including Medicare, declined to fully cover its controversial treatment for Alzheimer’s disease.
Vertex went public in 1992 and hit it big with its treatments for cystic fibrosis. Moderna, founded in 2010, didn’t turn a profit until its COVID-19 vaccine was approved for emergency use in 2020. It went from a net loss of $514 million in 2019 to net income of $12.2 billion last year.
Today, after many successes, failures, and takeovers, 18 biotechs sit in the top 100, and there are hundreds more public and private companies operating here.
In addition, related industries have grown in tandem with biotech, including medical devices, where Boston Scientific is the largest local player, and life sciences services providers such as Charles River Laboratories.
Which brings us to the most valuable company in Massachusetts today: Thermo Fisher Scientific. The company is the product of the merger of Thermo Electron and Fisher Scientific International in 2006. Both companies specialized in scientific and lab equipment, and together they rode the biotech boom for spectacular growth.
Their combined market capitalization at the time of the merger was about $14 billion; today it is $200 billion. Since the deal closed, the stock has returned an average of 17 percent a year, nearly double the S&P 500.
It’s fair to say that few people back in 1992 would have picked Thermo Electron to come out on top.
That’s worth keeping in mind as we survey today’s list and think how it will evolve over the next 30 years.
Correction: An earlier version of this story misstated where Analog Devices has its headquarters.