There May Be More to Irwin Jacobs Than You Know

There May Be More to Irwin Jacobs Than You Know

For those who knew and worked with Irwin Jacobs, a high-profile heyday and a tragic end are not how his impact should be measured.

Irwin Jacobs cast a long shadow in the Minnesota business community. A kid from north Minneapolis who only spent a day or two in college, whose dad ran a business reselling cotton and burlap bags, he rose to national prominence during the 1980s as one of the flashiest corporate raiders of that era. Jacobs led investment groups to buy significant stakes in companies, agitated for changes or threatened buyouts, and most often made a nice profit on higher share prices at the end of a short battle.

But after a life of business success, the news that Jacobs shot and killed Alexandra, his wife of 57 years, and then himself, on April 10 was a jolt—a jarring shock even to close friends and family. Reports that both he and his wife were battling degenerative health conditions didn’t make the tragedy any easier to understand and threatened to undo a reputation as one of the most successful and influential businessmen of his era.

The Wall Street Journal’s obituary remembered him as a “feared 1980s corporate raider.” (Today’s raiders are called “activist investors.”) Nearly every report of his death mentioned his notorious “Irv the Liquidator” appellation. “Maybe The Wall Street Journal gave him that nickname a long time ago and it just kind of stuck, but the truth is he actually had a lot of long-term businesses,” says Mark Jacobs, the eldest of Jacobs’ five children.

Mark Jacobs says one reason his father soured on corporate raiding was the scandals that started to swirl in the late 1980s. New York–based investment bank Drexel Burnham Lambert provided fuel and financing for many raiders. The firm went bankrupt in 1990; junk bond king and Drexel executive Michael Milken went to jail for securities violations.

“I think he was turned off when people he knew were doing really unethical things, insider trading. He was like ‘OK, I don’t want to be part of this.’ Drexel Burnham was his banker and he was like, ‘What the heck?’ ” says Mark Jacobs. “Carl Pohlad was his mentor. Carl was his partner from day one. Carl had a big influence on him and I think Carl was not that interested in that world either.”

The owner of the Minnesota Twins, banker Pohlad, who died in 2009, was often in deals with Jacobs. Together they once owned a stake in the Minnesota Vikings. (Carl Pohlad’s sons did not respond to requests for comment.)

Jacobs faded from the national spotlight after he stopped chasing high-profile companies like Disney, but he owned a core of bread-and-butter businesses for decades. Those included Jacobs Trading Co., which bought and sold inventory closeout merchandise; Genmar Holdings, which made many brands of boats and was once one of the largest U.S. boat manufacturers; and Winona–based Watkins Inc., a producer of spices and extracts.

“His [new] focus became the businesses, that’s where his passion was,” says Mark Jacobs, who has been CEO of Watkins Inc. since 1998. A 2004 profile in Forbes that focused on Genmar made the case that “Irv the Liquidator” had become “Irv the Operator.”

Mark Jacobs says that his father had interests in eight companies when he died, including Jacobs Trading and Watkins. Others included CEG Enterprises, another closeout company; the FLW tournament fishing group; and the Wisconsin–based maker of Carver, Marquis, and Lexus brand yachts. Also still in the portfolio: Jacobs Bag, which traces its roots to Irwin Jacobs’ father’s business.

Irwin Jacobs and his son, Mark Jacobs

Jacobs ranked on the Forbes 400 list of the richest Americans from 1986 to 1988. In his last year on the list, Forbes estimated his net worth at $240 million. Corporate Report, a defunct local business magazine, estimated Jacobs’ net worth at $400 million in 2000.

Jacobs Trading itself became a symbol of his knack for a deal. He sold it in 2011 for $140 million plus potential earn-out payments to Washington, D.C.–based Liquidity Services. It didn’t go well for the new owner. Jacobs bought the company back in 2015 for just $13 million, plus earn-outs worth up to $4 million. (Earn-out agreements call for additional money to be paid to the seller of a business if the buyer hits certain financial targets.)

Although he was 77 years old when he died, Jacobs never retired.

“That was his life,” Mark says. “His life was about sales and deals, and he always wanted to be in the game, no matter how big or how small it was.”

A bargain hunter

Jacobs’ first high-profile deal was the acquisition of the struggling Minneapolis–based Grain Belt beer company in 1975, with a pledge to turn the business around. But when that wasn’t working, he shut down the brewery, sold the brands to Wisconsin–based G. Heileman Brewing, and auctioned off the equipment. In another deal, Jacobs bought the receivables of the bankrupt W.T. Grant, a large national retail chain. Deals like those gave him a profile as a bottom-feeder, swooping in to make money on the wreckage of failed companies.

But in 2010, Jacobs told Twin Cities Business, the latter was a pivotal deal: “The deal that changed my life the most was when I bought the W. T. Grant receivables in 1976 for $40-some million. Carl Pohlad was a partner of mine in that transaction. We paid off [the purchase price] in 75 days and collected money for 10 years. It gave me the capital to go out there and do things.”

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“Doing things” in the 1980s meant being one of the corporate raiders of the era. Raiders bought up significant stakes in companies and used the leverage to demand management changes or threaten takeovers. But Jacobs usually didn’t take over. Instead, he made money by selling his stock at a profit at the end of the battle.

A 1985 profile in Fortune offered this summary: “Last year Jacobs tried to acquire Kaiser Steel, Walt Disney Productions, and Avco Corp., losing them all and making, with his associates, over $90 million. The theme of these exertions seemed to be ‘how to succeed by failing—or, how to make a fortune through thwarted takeovers.’ ”

Some would say that a corporate raider is just an astute judge of companies. “He was the kind of guy that saw value where a lot of people didn’t,” says Mark Jacobs. “He had just a real natural knack for that.”

Jacobs transitioned away from the niche as the 1980s ebbed. Murray Frank, a professor at the Carlson School of Management at the University of Minnesota, says that a confluence of factors put the brakes on raiders: the Tax Reform Act of 1986, new laws to make such deals tougher, and companies changing business strategies to make themselves less likely to be targets.

Whatever he was buying—stocks, companies, closeout merchandise—Jacobs was a bargain hunter at heart. “You make money in this business on the buy side, not by selling,” Jacobs told the St. Paul Pioneer Press in 1994, in reference to Jacobs Trading.

Jacobs was not a real estate pro, but he couldn’t pass up a deal. In 1993, he bought the Conservatory, a famously failed upscale shopping mall in downtown Minneapolis, for $1.5 million. The project cost $75 million and had only opened in 1987. Minneapolis–based Ryan Cos. later bought the site from Jacobs to build an office tower, now U.S. Bancorp Center.

Alexandra and Irwin Jacobs

“I bought an entire block in downtown Minneapolis for $1.5 million. I sold it for $13.5 million two years later,” Jacobs later told Forbes of the deal.

“He bought it for nothing,” recalls John Griffith, a development executive with Ryan Cos. when the deal was being put together. “When he saw something that he knew was super-cheap, he just bought it. He had a great nose for value.”

When he first bought the Conservatory, Jacobs hired the Minneapolis-based Ackerberg Group to lease and manage the property with an eye toward a major overhaul. But plans to remake it into an entertainment complex were discarded says Stuart Ackerberg, CEO of the Ackerberg Group.

“His style was very direct and focused. He was very efficient in that regard.” He recalls Jacobs saying he preferred to create something for the masses rather than the classes. “I think if you look at a lot of his business models, they were really designed for the masses,” Ackerberg says. “It wasn’t for the ultra-rich, it was for Middle America.”

Griffith remembers Jacobs as a tough negotiator, but also a man of his word. He also echoes others who say Jacobs had a larger-than-life presence, literally and figuratively.

“He was large in stature, he was a tall guy,” Griffith says. “He was just a very charismatic guy. He filled up a room when he walked in.”

Small towns, big investments

While Wall Street might have seen him as a villain in the ’80s, in Minnesota towns like Little Falls and Winona, Jacobs is seen as the man who bought and saved struggling local businesses and the jobs that went with them.

Watkins Inc. started in Plainview in 1868 and set up shop in Winona in 1885. But by the 1970s, the family company was in trouble. Jacobs bought it out of bankruptcy in 1978.

“Irwin Jacobs bought the company and at the time there was a lot of fear in the community. He was ‘Irv the Liquidator,’” says Mark Peterson, current mayor of Winona and executive director of the Winona County Historical Society. Residents worried that the business would be shut down and jobs would be lost. “That just never happened.”

After his death, the headline in the Winona Daily News fondly recalled him as the “savior of Watkins in the 1970s.”

A California private equity company bought Watkins’ personal care and household products lines in 2018 to spin off a separate business, J.R. Watkins. Mark Jacobs is vice-chair of the J.R. Watkins board and retains an ownership interest. Watkins Inc. remains based in Winona and employs about 200 people, most in the small Minnesota river town.

“It was initially solely a direct-selling company,” Mark says, of what drew his father to the business. “He had such fond memories himself of the quality brand from when he grew up and he also had a passion for the entrepreneurial side of direct selling.”

Jacobs also bought Little Falls–based Larson Boats out of bankruptcy in 1977. He later owned the Crestliner brand, also made in Little Falls. At its peak, his boat operations in Little Falls employed more than 700 people, recalls Carol Anderson, executive director of Community Development of Morrison County.

But when the Great Recession hit, Larson’s parent company Genmar spiraled into bankruptcy.

“He was trying to refinance and couldn’t,” Anderson says. Many Genmar assets were sold off to private equity, but Jacobs worked to hang onto Larson Boats. Anderson helped assemble a $1.3 million loan for Jacobs to buy Larson’s land, building, and equipment; Jacobs provided the working capital. Later, she strung together a $2 million loan to help Jacobs relocate another business to Little Falls.

“Irwin paid absolutely every loan off in full. He never once missed a payment. He’s been very good to us in Little Falls,” Anderson says.

Irwin Jacobs and his son, Mark Jacobs

Larson’s production relocated to Wisconsin in 2016, but Jacobs orchestrated the sale of the property to Indiana–based Wabash National Corp., a large manufacturer of trailers. Many Larson employees went to work for Wabash, she says. “We made a very smooth transition.”

Fishing seemed like a natural fit with his boat business. Jacobs teamed up with news anchor Don Shelby in 1989 to start the Don Shelby U.S. Invitational, a bass-fishing charity tournament. Shelby said he was told that Jacobs “has the biggest ego of anyone you’ve ever met in your life.” As a local TV celebrity, Shelby had his own ego; that changed when the two sat down together.

“The power of our egos face-to-face sucked all the oxygen out of the room, and our egos disappeared,” Shelby says. “After that, we were just Don and Irwin.”

Looking back, Shelby now sees the venture as another example of Jacobs’ empire building. In 1996, Jacobs bought Fishing League Worldwide (FLW), now the largest tournament-fishing organization on the planet.

Tough roots, strong instincts

Like Jacobs, Stu Ackerberg’s parents were from north Minneapolis, which was once home to a thriving Jewish community.

“My understanding was that for many of the immigrant population—certainly for blacks and for Jews—they were prohibited from living in certain areas of the city. … I think that’s why so many African-Americans and immigrants wound up on the north side,” Ackerberg says.

Finding success in business meant forging your own path.

“He had to figure out how could he control his own destiny, because many of the doors that were open to other people were not open to him. You had some amazing entrepreneurs that emerged because they were forced to.”
—Stuart Ackerberg, commercial real estate developer

“He had to figure out how could he control his own destiny, because many of the doors that were open to other people were not open to him,” Ackerberg says. “You had some amazing entrepreneurs that emerged because they were forced to.”

Sometimes connections from the old neighborhood became important business relationships.

In 1983, Jacobs and Ted Deikel gained control of C.O.M.B., a company with wholesale, retail, and mail-order divisions, from entrepreneur Dennis V. Carlson who founded the company in 1968. “We’re both from north Minneapolis. We were friends, the families were close,” says Deikel, former CEO of Fingerhut Cos., of Jacobs.

They noticed that a group out of Florida was buying a large percentage of C.O.M.B.’s inventory. The buyer turned out to be the fledgling Home Shopping Network “I saw the concept as something that was going to be growing like crazy,” Deikel says. “What it required was a relationship.” C.O.M.B. became the Cable Value Network—but needed a cable network with subscribers.

“Irwin negotiated the relationship,” Deikel says. Jacobs hammered out a deal with John Malone, who led cable giant Tele-Communications Inc. In 1989, QVC acquired CVN for $400 million.

Deikel recalls that Jacobs had unwavering confidence in his business instincts. “Whatever decision he made became the right decision in his mind. He just plowed ahead.”

In a 2010 interview with TCB, Jacobs was asked about his obituary. Here’s what he said:

“What’s important is how you feel about what you’re doing. That’s the impression left on society. I can’t live worrying about what other people think of me, although we all want to think that others believe we’re doing some good.”

Burl Gilyard is TCB’s senior writer.