Worcester Business Journal

4 Worcester Business Journal • March 16, 2015 www.wbjournal.com A s part of his first budget, Gov. Charlie Baker wants to get rid of the state's film tax credit, which was passed in 2006. While the plan has received support from some quarters, key Democratic legislators have raised questions about the plan, which could lead to a showdown when the House and Senate take up the budget in the coming weeks. Why does the governor want to ditch the credit? Cutting the credit, Baker reasoned, would help pay for a doubling of the state's earned income tax credit, from 15 percent to 30 percent of the federal limit, as a way to help some of the state's poorest citizens. Officials of the administration questioned the effec- tiveness of the film tax credit, which costs the state $80 million a year in revenue. According to the State House News Service, the officials pointed to a 2012 study by the Department of Revenue that found two- thirds of jobs linked to the tax break were created out of state, and that the cost for each job created in the commonwealth was $108,000. What does the credit provide? If a production house spends more than $50,000 in any year in Massachusetts, it's eligible for a tax break equal to 25 percent of its wages paid within the state. How much has it helped the state's economy? The DOR study said the credit resulted in $67.9 mil- lion in net new spending in the Bay State economy in 2012, and $260.9 million from 2006 to 2012. On the jobs side, the DOR said there was a net gain of about 730 full-time-equivalent positions in 2012, a figure that includes jobs held in other states. However, there was a net gain of 622 new jobs for non-Massachusetts resi- dents in that same year. Who's with Baker on the proposal? The Boston Globe endorsed Baker's proposal in an editorial. The right-of-center Massachusetts Fiscal Alliance also endorses the plan, as does the Massachusetts Budget and Policy Center. The non- profit, nonpartisan research organization argues that the tax credit is expensive when stacked up against the additional tax revenue it creates. Who's against it? Within the legislature, House Majority Leader Ronald Mariano, for one, said it was a "pretty good move" politically for Baker to link the film and earned income tax credits, but questioned Baker's assessment of the former, according to State House News Service. At New England Studios in Devens, the state's only full-service production studio, spokeswoman Justine Griffin released a statement that warned of potential repercussions for "thousands of Massachusetts jobs in the film industry," and immediate consequences for New England Studios. n WORCESTER – Webster First Federal Credit Union (WFFCU), which is based in Worcester, is merging with Boston-based Industrial Credit Union (ICU), the two institutions announced. The merger will take effect May 31, pending regulatory approvals, Webster First said in a statement. Webster said ICU's board of directors voted unanimously last month to pur- sue the merger. "We look forward to … strengthening our presence in the Boston market," Michael Lussier, WFFCU president and CEO, said. In the last few years, Webster First has completed mergers with Saugus Federal, Fitchburg Federal, Winthrop Federal, and Filene Federal credit unions. MARLBOROUGH – Boston Scientific has agreed to acquire the urology division of American Medical Systems for about $1.6 billion in cash, the Marlborough-based life sciences company announced. It's the company's largest acquisition since it bought car- diovascular products maker Guidant Corp. in 2006 for $27.2 billion. American Medical Systems (AMS) is a division of Endo International, which is based in Dublin, Ireland. Published reports said Boston Scientific (BSX) was close to a deal with Endo for an unspecified unit of AMS. The urology unit of AMS is based in Minnetonka, Minn., and employs 800 worldwide. The unit includes its men's health and prostate health business. (See related story, Page 7.) WESTBOROUGH – SimpliVity has raised $175 million in Series D fund- ing, the technology company said. This comes less than two years after the release of its flagship product, the OmniCube, and brings the company's value to $1 billion, SimpliVity said. Waypoint Capital led the new round. Prior investors Accel Partners, Charles River Ventures, DFJ Growth, Kleiner Perkins Caufield & Byers and Meritech Capital Partners also contributed. SimpliVity's total venture funding is now $276 million. SimpliVity's niche is converged infrastructure, which tech- nology combines different IT compo- nents into one optimized package. FRAMINGHAM – Staples Inc. saw a steep decline in earnings per share in the fourth quarter of 2014, along with weaker sales. And the office supplies retailer expects sales to continue to fall in the first quarter of 2015. Staples, which is merging with Office Depot, said total sales for the fourth fiscal quarter, which ended Jan. 31, were $5.7 billion, down four percent from the fourth quarter of 2013. The change in earnings per diluted share was dramat- ic, with Staples reporting a net quar- terly loss of $260 million, or 41 cents per share. By contrast, the previous fourth quarter yielded net income of $212 million, or 33 cents per share. A statement from the company said fourth-quarter results included $74 million in pre-tax restructuring and other charges. FRAMINGHAM – Ameresco Inc. reported financial gains in its fourth- quarter and full-year 2014 results. The energy efficiency and renewable energy company said revenues for the fourth quarter, which ended Dec. 31, were $181 million, higher than the $176.1 million of the fourth quarter in 2013. Net income for the quarter was $8.7 million, more than six times the $1.6 million Ameresco earned in 2013. For the year, revenues advanced slightly to $593.2 million from $574.2 million in 2013. Net income more than quadru- pled to $10.4 million from $2.4 million. WORCESTER – Pharmaceutical giant AbbVie, which has operations in Worcester, will acquire Pharmacyclics, maker of the blood cancer treatment Imbruvica (ibrutinib). AbbVie, based outside Chicago, said it will pay $261.25 per share in a combination of cash and stock, to acquire the California-based company. The transaction values Pharmacyclics at about $21 billion, and was approved by both companies' boards of directors. BERLIN – Cabela's, the chain of out- door clothing and equipment stores, will open its new store in Berlin on March 26, a spokesman for the com- pany said. The 100,000-square-foot store, the company's first Massachusetts location, will be in the Highland Commons Shopping Center, just off Route 62 on the Hudson line, about a quarter-mile east of Interstate 495. In December, the Nebraska-based com- pany said it was hiring about 200 full- time, part-time and seasonal staff for the store. HUDSON – A 128-year-old family- owned lumber company in Hudson has been sold to Koopman Lumber of Whitinsville and now bears the Koopman name. Lamson Lumber announced the change on its website. Koopman, a 75-year-old company, has six other locations, all but one in Central Massachusetts. In a message on its website, Koopman said it has "enor- mous respect" for the Lamson family and called it a privilege to join forces with them. The company said the Hudson site will be run by its most experienced manager, Dave Wiersma, who has been with Koopman for more than 40 years. REGIONAL BRIEFS >> Continued on next page Verbatim "At the end of the day, for the venues, we need to make sure (they) comply with the interna- tional standards." Richard Davey, CEO of Boston 2024, on the remote prospect that Lake Quinsigamond would be a rowing venue for the 2024 Olympics, should Boston be selected to host the Summer Games. Source: Telegram & Gazette, March 10 >> "It is our hope that the private sector will respond to the new zoning changes and bring forward proposals that will continue to build upon our great Main Street streetscape." Tim Cummings, executive director of the Marlborough Economic Development Corp. (MEDC), highlighting the potential for new mixed-use development in downtown Marlbor- ough, which developers toured on March 10. Source: MEDC, March 10 >> "This is simply an unsustainable path for Massachusetts - we must live within our means." Gov. Charlie Baker, commenting on spending growth that exceeds state revenue, in a statement released with his proposed fiscal 2016 state budget, which caps spending growth at around 3 percent. Source: Governor's Office, March 4 >> BRIEFING: FILM TAX CREDIT CENTRALMASS In Review

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