Motion Dynamics Corporation Announces Strategic Partnership

September 12, 2016 - PR Newswire

Motion Dynamics Corporation, a Fruitport, Mich.-based manufacturer of custom wire components for the medical, electronics, aerospace and military markets, today announced its strategic partnership with Vance Street Capital, a Los Angeles-based private investment firm.

Motion Dynamics manufactures some of the smallest and most difficult wire components in the world. The company focuses primarily on the design, engineering, production and assembly of high quality wire components and sub-assemblies for medical device applications.

"Our company has achieved significant growth and performance since its inception, and we have been seeking the right opportunity to significantly accelerate that growth and take our performance to an even higher level," said Chris Witham, president of Motion Dynamics. "Given this strategy, we believe that now is the ideal time to bring in a strategic investor to deliver on our business goals, and Vance Street Capital, with over two decades of experience and a proven track record, is the right partner to help us achieve that next level of growth."

Vance Street Capital is a private investment firm which primarily invests in middle-market businesses that are established leaders in providing highly engineered solutions for niche markets in the aerospace, defense, industrial and medical sectors.

Motion Dynamics was advised throughout the transaction process by Charter Capital Partners, exclusive financial advisor in the transaction. Principals of Charter Capital Partners acted on behalf of the company in their capacity as licensed investment banking agents of M&A Securities Group, Inc. Miller Johnson served as legal advisor.

"We worked closely with Chris to identify the best match to continue his vision of the company," said Jason T. Byrd, managing director at Charter Capital Partners. "With its unmatched expertise in providing strategic support and investment capital to companies in the medical and aerospace operations, Vance Street Capital presents a unique ability to assist current leadership in further enhancing the company's robust growth."

Chris Witham and the existing management team will continue to lead the company. more

Charter advises Kentucky furniture manufacturer in deal with PE firm

August 28, 2016 - MiBiz

An investment banking adviser believes the current environment in the contract furniture industry should lead to more deals getting done before the end of the year. Andrew Williams, a director at Charter Capital Partners and head of the firm’s national contract furniture industry practice, said the sector mirrors what’s going on in other industries. “Contract furniture is no different than the broader North American economy with a lot of baby boomers identifying a succession plan in their businesses,” Williams told MiBiz. “There are certainly more deals to come yet this year.”

Williams served as lead on the transaction advisory team for Louisville-based KFI Seating, which last week announced a deal with Weller Equity Partners, also of Louisville. In the deal, two of the company’s owners looked for an equity partner to buy out a third owner who was looking to retire, as well as give the firm resources to grow, he said. The three co-owners were “able to achieve their financial and personal goals” and allow the two partners to remain with the company after the deal. 

As the company went to market, it garnered “significant interest” from strategic investors and private equity firms alike, Williams added. The response to the KFI deal was emblematic of the capital chasing opportunities in the broader industrial sector, said Williams, who has long ties to contract furniture. “In contract furniture, M&A remains very healthy with too much capital chasing … deals out there,” he said, adding that since the KFI deal was announced, he’s already received calls from other prospects. 

Charter Capital, which also operates two Indiana-based offices in South Bend and Indianapolis, first connected with KFI Seating during the 2015 NeoCon contract furniture trade show in Chicago. The company, which manufactures seating and table products, had looked at another deal Charter was representing at the time and stayed in contact, according to Williams. “With our roots in Grand Rapids and our contacts across the country, we’re working on projects all over the U.S.,” he said.

Charter Capital formed the contract furniture practice in 2013, announcing it at that year’s NeoCon. Since then, the firm has worked on deals involving all three levels of the industry, including OEMs, suppliers and distributors. The company represented Interphase Interiors, Sauder Manufacturing, The Worden Co., and Bold Furniture on recent transactions. more

Weller Equity Partners Acquires KFI Seating

August 22, 2016 - PR Newswire

Weller Equity Partners (Weller), a Louisville, KY-based private equity firm, today announced that it has acquired KFI Seating (KFI), a Louisville, KY-based leading supplier of business and institutional furniture products. The acquisition closed on July 29, 2016.

"We have been looking for an experienced partner to help us replace a retiring co-owner and key executive, while keeping our sights fixed on the continued growth and development of our business," said Chris Smith, president of KFI. "We feel very comfortable with our new partnership with the Weller team, especially considering we are both based in Kentucky," added KFI Chief Operating Officer Scott Williamson.

According to Ken Berryman, managing partner of Weller, "The KFI transaction is a classic fit for Weller as we look to partner with existing management teams to provide liquidity for shareholders, capital for growth, and organizational development to help businesses achieve their full potential."

KFI was represented by Charter Capital Partners, with Andrew Williams, director, leading the transaction advisory team. "A key component of the transaction's success was making sure everyone's interests were aligned," commented Williams. "The transaction was designed so that each co-owner of KFI was able to achieve their financial and personal goals, while providing the company with a strategic partner to propel future growth. It was a win-win for all parties."

Additional advisors to Weller included Frost Brown Todd (legal) and BKD (financial). more

Louisville equity firm acquires local furniture company

August 22, 2016 - Louisville Business First

Weller Equity Partners, a Louisville-based private equity firm, has acquired the Louisville-based furniture supplier KFI Seating. The acquisition closed July 29. Weller Equity invests in lower middle-market companies ($5 million to $50 million in revenue) in the Mid-South region of the U.S. The firm provides funding structures and private equity expertise to a company's owners, particularly in the manufacturing, health care, information technology and food and beverage industries.

"We have been looking for an experienced partner to help us replace a retiring co-owner and key executive, while keeping our sights fixed on the continued growth and development of our business," Chris Smith, the president of KFI, said in a press release.  Scott Williamson, the chief operating officer at KFI, said that he is comfortable with the partnership with Weller, because both companies are based in Louisville.

"The KFI transaction is a classic fit for Weller as we look to partner with existing management teams to provide liquidity for shareholders, capital for growth and organizational development to help businesses achieve their full potential," Ken Berryman, the managing partner at Weller Equity, said in a press release.

The financial details of the deal were not disclosed. KFI was represented by Charter Capital Partners, with director Andrew Williams leading the advisory team. more

Lawsuit questions legality of Herman Miller's Acquisition of Design Within Reach

June 10, 2016 - MiBiz

Herman Miller Inc.’s highly praised $154 million acquisition in 2014 of high-end furniture retailer Design Within Reach Inc. may not legally have occurred. That’s according to a pair of former Design Within Reach (DWR) shareholders who filed a lawsuit in December 2014 against the company’s current and former owners. The lawsuit alleges the company violated Delaware law in how it executed a 1-for-50 reverse stock split, a move that predated its acquisition by Herman Miller.

While plaintiffs Andrew Franklin and Charles Almond name Herman Miller in the lawsuit, the pair appear to be using the office furniture manufacturer as leverage to put pressure on the former majority shareholders of DWR, according to a lawyer who spoke to MiBiz and asked not to be named in this report. The lawyer described the lawsuit as an “unusually messy situation.” For one, if the reverse stock split did not occur from a legal standpoint, it means Herman Miller purchased far fewer shares than was required to complete the 2014 acquisition of DWR under Delaware law, making the transaction null, according to multiple sources.

High-profile acquisitions can often bring about lawsuits from unhappy shareholders, but this deal appears to have some unique characteristics, said Christine Baker, managing director of business valuation services at Grand Rapids-based Charter Capital Partners. “I’ve heard of dissenting shareholder suits not infrequently,” Baker said. “But someone asserting that the deal never actually closed is a new one to us, especially for companies that have to report so much in a public way. That’s kind of stunning.” more

Firm raises $5M venture capital fund

June 3, 2016 - Grand Rapids Business Journal

A local investment banking firm has raised a $5-million venture capital fund to continue investing in Michigan companies. Grand Rapids-based Charter Capital Partners, an investment banking and capital management firm, said today that it has closed its MAF Opportunity Fund, which the firm designed to invest in companies already backed its predecessor fund, the Michigan Accelerator Fund I.

The new $5-million fund was oversubscribed with commitments from institutional, family office and individual investors. “The fact that the fund was oversubscribed in seven weeks indicates that investors support our vision and the investment thesis of early stage investing in Michigan-based companies,” Charter Capital Partners Managing Director Dale Grogan said. “We have seen tremendous investment opportunities over the past five years and fully expect that this trend will continue as realizations occur.”

The fund is managed by Charter managing directors Grogan and John Kerschen, along with Brian Hamilton, senior venture capital associate. “As our portfolio companies mature, they have continued capital needs,” Kerschen said. “Like many smaller, early stage venture funds, we were nearly fully deployed and had limited ability to continue investing in the portfolio, hence the development of the MAF Opportunity Fund.” more

New $5 million fund to continue investment in Michigan Accelerator Fund companies

June 3, 2016 - MiBiz 

A new venture capital fund in Grand Rapids that will do tack-on deals for existing portfolio companies of Michigan Accelerator Fund I closed this week after raising $5 million from investors. MAF Opportunity Fund was oversubscribed and secured commitments from backers that include institutional and individual investors as well as family offices. The fund will make follow-on investments to support companies that are already backed by Michigan Accelerator Fund I and need later-stage funding, as MiBiz exclusively reported last month.

“Over the past five years, we believe that we have built a strong portfolio within the Michigan Accelerator Fund, with several companies demonstrating excellent progress towards value accretion and a near-term exit,” Co-managing Director John Kerschen said in a statement. “As our portfolio companies mature, they have continued capital needs. Like many smaller, early-stage venture funds, we were nearly fully deployed and had limited ability to continue investing in the portfolio. Hence the development of the MAF Opportunity Fund.” more

Michigan Accelerator Fund closes opportunity fund, oversubscribed

June 3, 2016 - Michigan Venture Capital Association

Charter Capital Partners, a Grand Rapids, Mich.-based investment banking and capital management firm, today announced the closing of the MAF Opportunity Fund. The $5 million fund was over-subscribed with investment commitments coming from institutional, family office, and individual investors. The Fund was organized to invest in elite companies from its predecessor fund, Michigan Accelerator Fund I.

John Kerschen and Dale Grogan, both managing directors of Charter Capital Partners, also serve as managing directors of the Michigan Accelerator Fund I and the MAF Opportunity Fund. The management team is rounded out by Brian Hamilton, Senior Venture Capital Associatemore

Michigan Accelerator Fund seeks $5 million raise for tack-on fund

May 15, 2016 - MiBiz

The managers of Michigan Accelerator Fund I are seeking to raise up to $5 million from investors to provide further financial backing to portfolio companies. Four of the Grand Rapids-based venture capital fund’s eight existing portfolio companies may need additional capital in the near future, said co-Managing Director Dale Grogan. Capital raised for the new MAF Opportunity Fund LP could go to make follow-on investments in those companies, plus one new investment, Grogan said.

Grogan said he remains confident that Michigan Opportunity Fund will raise the $5 million by this summer. Part of the pitch to prospective investors is that the new fund will offer later-stage venture investments to companies with less risk than when they first began. Each of the companies has long been vetted and their innovation and technology have been validated in prior investment rounds, Grogan said.

“We have the benefit of living with these companies,” he said. “These are companies we have known intimately. They are very hands-on investments for us.” Grogan and his partner, John Kerschen, formed Michigan Accelerator Fund I in 2010. They hope to eventually create a much larger successor venture fund in the future. more

Fehsenfeld family relinquishes control of Crystal Flash

May 13, 2016 - Grand Rapids Business Journal

For three generations, Crystal Flash has been controlled by the Fehsenfeld family. Now, however, one of the largest fuel distribution companies in the state has new owners — lots of them. Crystal Flash on April 28 established an employee stock ownership plan, commonly known as an ESOP, to ensure the company’s long-term future.

The propane retailer services approximately 24,000 Lower Peninsula customers through 14 locations in the state. The company is now 100 percent employee-owned, said Tom Olive, president. “Our 250 team members are very excited by this opportunity. They’re very grateful for the gift of the family, and the trust they’ve placed in us. They’re excited to continue growing the business,” he said. “As always, our goal is to provide customers with reliable and high-quality service. We believe an ESOP puts us in the best position to continue that commitment to our valued customers.”

Warner Norcross and Judd LLP provided Crystal Flash with legal counsel for establishing the ESOP, Olive said, adding Charter Capital Partners served as financial advisors and Mercantile Bank of Michigan provided the financing. All of them served as “exceptional partners” during the transaction, he said. more

Crystal Flash sold to employees through ESOP transaction

May 6, 2016 - MiBiz

Following a two-year preparation process, Crystal Flash has successfully transitioned to a 100-percent employee-owned company. The Grand Rapids-based fuel distribution company’s roughly 250 employees purchased Crystal Flash in late April from longtime owner and Chairman Tom Fehsenfeld via a leveraged employee stock ownership plan (ESOP).

As a leveraged ESOP, Crystal Flash’s employees borrowed an undisclosed sum from Mercantile Bank to purchase the company instead of the owner contributing stocks to the employees, as is the case in a non-leveraged ESOP. Grand Rapids-based Charter Capital Partners and Warner, Norcross & Judd LLP advised Crystal Flash on the process.

Going forward, Crystal Flash plans to continue its strategy of making strategic acquisitions, a strategy the company put on hold during this transition. more

Startup uses gaming tech for virtual health care

March 20, 2016

Backed by a recent $2 million capital raise, a startup Grand Rapids-based digital health company plans to expand its sales force and further develop its software that allows patients to receive virtual care at home. The latest investment came as RespondWell LLC seeks to close another $8 million fundraising round to support the company’s development. “It will take us to scale,” RespondWell co-founder, Chairman and CEO Ted Spooner said of the capital raise that included investments from Start Garden and Michigan Accelerator Fund I in Grand Rapids.

Michigan Accelerator Fund I first learned of RespondWell more than a year ago at a pitch event hosted by the Cleveland Clinic, said co-Managing Director Dale Grogan. As the venture capital fund heard more about RespondWell, it decided to make an investment because the company was led by a seasoned management team and offered a promising technology that’s starting to change how health care is delivered, he said. more

Southwest Michigan’s Advia Credit Union plans to acquire Wisconsin bank

March 6, 2016

Advia Credit Union’s proposed acquisition of Mid America Bank, a small community bank in southern Wisconsin, is the kind of deal that occurs infrequently in the financial services industry. The last instance in Michigan of a credit union acquiring a bank was the 2011 deal in which United Federal Credit Union of St. Joseph acquired Griffith Savings Bank in northwestern Indiana, which had assets of $81 million.

“It’s a relatively unusual, but certainly not an unheard of circumstance,” said Ken Ross, executive vice president and chief operating officer of the Michigan Credit Union League. The credit union trade publication CU Today reported that eight mergers have occurred since 2011 between U.S. banks and credit unions, including the United Federal Credit Union deal for Griffith Savings Bank.

Bank acquisitions by credit unions occur usually when a bank is in distress, or is too small to attract the interests of another bank and “has limited opportunities” to pursue, said Jason Byrd, managing director of the financial institutions practice at Charter Capital Partners in Grand Rapids. “I don’t see this as an exit path for most banks,” Byrd said. “You could see them happening, but there will be special circumstances.” more

MichBio report outlines path to continued life sciences industry investment, growth

February 21, 2016 - MiBiz

A new roadmap aims to reboot efforts to build Michigan’s life sciences industry and compete with similar clusters around the U.S. and the world.While the industry has come far in the last decade-plus and offers “strong assets,” it remains uncompetitive compared to other states and requires a renewed private- and public-sector effort to grow and meet its potential, according to a report by MichBio, an Ann Arbor-based trade group.

One investor in Michigan’s life sciences industry views MichBio’s Roadmap for Success as aligning key players in the industry — the academic, scientific and business interests. What’s needed is more public-sector awareness in Lansing, said Dale Grogan, managing director of Michigan Accelerator Fund I and Charter Capital Partners in Grand Rapids.

“The other side of the equation is the legislators,” Grogan said.  “I think we still have a ways to go in building understanding and, more importantly, convey the need for sustained investment. Sustained is the word I think we have to underline there because it takes a long, long time to build an industry, particularly one that has lots of regulatory necessities and lots of capital requirements moving into it.” more

Chemical, Huntington acquisitions signal renewed momentum in M&A market

February 7, 2016 - MiBiz

 A pair of deals would give Chemical Financial Corp. and Huntington Bancshares Inc. larger footprints in Michigan and could renew the momentum for bank M&A in the state. The reason: Interest remains high among banks to at least explore a deal with a peer because they’re being pressured to drive growth and efficiencies as regulatory compliance costs rise and as organizations feel the need to invest in mobile banking technologies.

Chemical Financial’s $1.1 billion proposed acquisition of Talmer Bancorp Inc. and Huntington’s $3.4 billion acquisition of FirstMerit Corp. “should assist community bank boards in their efforts to determine the future of their respective banks as a buyer or seller and take appropriate steps in that regard,” said Jason Byrd, a managing director at Charter Capital Partners.

Recent acquisitions have made Chemical Financial a “meaningful player” across the state. “They are definitely carving out their piece of the market and they are absolutely going to be a competitive force in the state,” Byrd said.

There remains a lot of talk across the industry about bank M&A in the state. However, one potential barrier for future deals is that some banks are not looking to buy a smaller peer. The appetite among larger community banks to buy a bank below $1 billion in assets is “limited (because) the complexity of getting a deal done does not vary that widely,” Byrd said. “So in that market, sub-$1 billion, I believe when the actual transactions do come together, you will see similarly sized banks coming together under merger of equals structures.”

Directors and shareholders at some small community banks want to get the efficiencies that a merger can bring, yet they do not want to lose their community identity, Byrd said. He believes that has “pushed off” consolidation in the lower end of the market. “At some point, I believe that many of these community banks will need to find a partner,” Byrd said. more

Truck supplier acquires North Carolina company

January 28, 2016 - Grand Rapids Business Journal

Muskegon-based Fleet Engineers has acquired Charlotte, North Carolina-based Save-A-Load, a maker of cargo bars for tractor trailers and pickups. Wes Eklund, president of Fleet Engineers, said Save-A-Load has built an excellent reputation for responsive services and a commitment to quality by leveraging technology to deliver driver-friendly products. “This acquisition will enhance the current cargo-management solutions for our customer base, and we are thrilled about the opportunity to manufacture and distribute a new, high-quality product that is unique within the market,” Eklund said. “We are poised for exciting growth and look forward to integrating the manufacturing expertise of Save-A-Load.”

Charter Capital Partners, a Midwest investment banking firm, served as the merger and acquisition advisor for Fleet Engineers during the process. Elisa Miller, associate at Charter Capital Partners, said the firm worked closely with Fleet Engineers’ ownership to identify a partnership that would support the company’s dedication to delivering solutions to enhance fleet operations. "We believe the acquisition of Save-A-Load will strengthen the company’s made in the U.S.A. manufacturing presence, while also increasing the value proposition to the market and enhancing overall efficiency for fleets,” Miller said. more

Fleet Engineers buys N.C. truck and trailer accessory manufacturer

January 28, 2016 - MiBiz

Fleet Engineers Inc. of Muskegon has expanded its truck and trailer business with the acquisition of Charlotte, N.C.-based Save-A-Load Inc., a maker of cargo bars for tractor trailers and pickups. According to a statement, Save-A-Load has produced a hydraulic cargo-bracing bar since 1994. Fleet Engineers President Wes Eklund said the product’s reputation and the company’s service model and efficiencies proved attractive in considering the deal.

Grand Rapids-based investment banking firm Charter Capital Partners served as the M&A adviser to Fleet Engineers. more

Executive Roundtable: M&A outlook remains positive for 2016, but could soften at year’s end

January 25, 2016 - MiBiz

Mergers and acquisitions professionals tend to rave about how 2015 was a spectacular year for their practices. By all accounts, 2016 should shape up as another strong year, particularly as banks compete for deals and private equity firms still have plenty of dry powder to deploy. Also bolstering the current market, at least for sellers: Corporate balance sheets remain healthy, and valuations should continue to hold steady at their current elevated levels.

According to John Kerschen, Managing Director, Charter Capital Partners, "With the amount of capital that’s still out there in the marketplace, even if the economy comes down, it’s still going to be providing a bit of a floor for the valuations. Private equity still has the capital. They still need to get it deployed. They’re still going to be searching for places to give it."

But when asked for their forecast beyond this year, industry professionals MiBiz gathered for a roundtable discussion on M&A say their view is foggy at best. As such, they said the window of opportunity for sellers could start to close in late 2016. more

Manufacturers turn to M&A to fill void in capacity

January 24, 2016 - MiBiz

After running as lean as possible in the years following the recession, West Michigan manufacturers are embracing acquisitions as a strategy to add capacity and meet customer demand. That was the case Mill Steel Co. when it acquired assets of S&S Steel Services after the company fell into bankruptcy as a result of a tumultuous steel market and excess inventory. The acquisition underscores the larger M&A climate in West Michigan and elsewhere in which manufacturers are acquiring other firms to increase their capacity, said John Kerschen, managing director of Charter Capital Partners, a Grand Rapids-based M&A firm and investment bank.

“We’ve seen acquisitions that are capacity-related (because) we’ve had a pretty good stretch here in the economy and some suppliers have needed to keep up with their customers,” Kerschen said. “Those may be things like international expansion, new automation and technology — and those are big expenditures.” On the other hand, as some executives grapple with a lack of capacity in their operations, it’s encouraged them to sell, he said. “We’ve also seen some deals where a seller may not want to sell but may not have the capability to follow their customers.”  more

Hot capital market balanced by lack of early stage investors

January 10, 2016 - MiBiz

Michigan’s venture capital and angel investment industry is growing up fast, getting more sophisticated and starting to make later-stage investments into companies. Meanwhile, private equity firms continue to operate in a hot acquisition market, and family offices are taking a large presence as well and competing more for deals. Those were some of the perspectives from a panel of professionals who met with MiBiz for a roundtable discussion on the state of private capital in Michigan.

According to Dale Grogan, managing director of the $15.1 million Michigan Accelerator Fund I and managing director at Charter Capital Partners, "The venture industry is maturing significantly in Michigan. After the thaw in Michigan in 2010 and ’11, lots of funds started coming into being and so we’re now seeing that maturing where those initial investments were made. We’re starting to see a separation in the quality of the investments, and there’s a separation also occurring in terms of the entrepreneurs. Those guys that know what they’re doing that have access to the markets are finding velocity. Those that don’t are still going to have a tough time, particularly when you look at the angel groups and early-stage investors moving downstream."  more

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