New fund model opens VC investing options to wealth advisers

August 3, 2018 - MiBiz

GRAND RAPIDS — The newest investment fund in West Michigan offers a new model for individual investors to take their first steps into the world of venture capital.

Charter Capital Partners in Grand Rapids formed the Henrickson Nauta Venture Fund 1 LP on behalf of Belmont-based wealth management firm Henrickson Nauta Wealth Advisors Inc.

According to executives, the new fund serves two purposes in diversifying Henrickson Nauta Wealth Advisors’ product offering and creating a direct link to the higher returns possible with venture capital investing compared to the public equities market.

“We are open to looking at alternative investments and alternative investing in general,” said Jeff Nauta, a principal and chief compliance officer at Henrickson Nauta Wealth Advisors.

The firm has high net worth clients, generally retirees, who are “looking at and growing more and more comfortable with the idea of alternative investments,” Nauta said.

“Clients have an appetite for this,” he told MiBiz. “We see a growing trend, especially among business owners who’ve had a liquidity event. They know business and they like to maybe maintain that cadence as far as reviewing the financials and understanding what’s going on in the business.”

Charter Capital Partners envisions a series of annual or biannual funds in which wealth managers have access and input into investment decisions, Grogan said. Charter Capital Partners manages the new fund on behalf of Henrickson Nauta Wealth Advisors, which has a representative on the investment review committee, he said. more

With flurry of deals, office furniture companies seek to fill product gaps

June 24, 2018 - MiBiz

Whether via acquisition or partnership agreements, West Michigan’s office furniture makers are looking to fill product holes with their recent spate of deals. In the span of about six months, Grand Rapids-based Steelcase Inc. (NYSE: SCS) and Zeeland-based Herman Miller Inc. (Nasdaq: MLHR) announced nearly $286 million in acquisitions. The deals signaled to industry watchers that the largest office furniture OEMs were getting serious about adding new capabilities, chasing sales and rounding out their product portfolios.

“I think most of the larger companies in the industry are actively pursuing acquisitions currently,” said John Kerschen, president and managing partner of Charter Capital Partners, a Grand Rapids-based investment banking firm that includes an M&A practice focused on the office furniture industry.

“A fair share of that (dealmaking) is this transition from selling furniture to being space solution providers for the entire space,” Kerschen said. “It’s about having product and solutions for the entire space, not just desk chairs.” more

For Holland VC, fundraising environment remains 'pretty healthy'

March 18, 2018 – MiBiz

The organizers behind the new cultivate(MD) Capital Fund GP LLC found backers by appealing to their own global professional networks and investors with whom they had previously done business. The approach led cultivate(MD) to close this month on the first $7.2 million toward a $10 million goal the fund aims to raise in what Managing Director Rob Ball calls a “pretty healthy” fundraising environment.

As cultivate(MD) scouts for deals, the health care arena offers plenty of opportunity for firms targeting early-stage medical device startups, said John Kerschen, managing director of Michigan Accelerator Fund I, a Grand Rapids-based venture capital fund that has fully deployed all of its capital. Venture capital funds targeting the medical device sector “have tended to drift a bit later in the device space,” he said. “I still believe there’s a significant amount of deal flow, particularly at the earlier stage,” Kerschen said. “There’s still a significant amount of innovation and entrepreneurship in that space relative to the dollars dedicated.”

Kerschen also sees a fundraising environment that remains positive, even with investors finding good returns from the stock market and with Michigan’s economy at a relatively strong position overall. Venture capital and private equity firms are still relatively young markets in Michigan. While both areas have posted solid growth for more than a decade — and the pool of prospective investors has expanded — early investors who put money into funds “are waiting for the return or proof of returns from some of those early investments before they commit substantially more capital,” Kerschen said. more

Advisers expect strong deal flow for 2018, despite talent, geopolitical challenges

January 7, 2018 - MiBiz

M&A activity should remain strong in 2018 and perhaps get a push from federal tax reform.

As well, rising interest rates should not pose a barrier to deal flow, although most companies — whether on the buy-side or sell-side — face a key challenge with finding skilled talent. 

That’s according to a group of M&A advisers that MiBiz gathered for a roundtable discussion on the state of the deal-making market in West Michigan. 

Participants in the roundtable were:

  • Mike Brown, partner with Charter Capital Partners, a Grand Rapids-based investment banking firm
  • Jason Byrd, co-founder and managing partner at Concurrence Capital Holdings LLC, a Grand Rapids-based private equity firm
  • Jeff Helminski, managing partner at Grand Rapids-based Auxo Investment Partners, a private equity firm
  • Rajesh Kothari, managing partner at Cascade Partners LLC, an investment banking and private investment firm based in Southfield
  • Remos Lenio, partner at Grand Rapids-based Tillerman & Co., an investment banking and merchant banking firm
  • Matthew Miller, managing partner at BlueWater Partners LLC, a Grand Rapids-based investment banking and consulting firm
  • John Pollock, managing director of LV2 Equity Partners LLC, a Grand Rapids-based private equity firm 
  • Peter Roth, partner at Grand Rapids-based Varnum LLP, which sponsored the discussion

Here are some highlights from the discussion. 

Chicago PE firm acquires majority stake in Grand Rapids health care auditing company

January 14, 2018 - MiBiz

SpendMend LLC, a company that provides spending visibility and audit and recovery services to the health care industry, sold a majority stake to Chicago-based private equity firm Sheridan Capital Partners.

The recapitalization and investment from Sheridan Capital, which invested along with SpendMend’s founders and managers, will support the continued growth of the company.

Terms of the deal were not disclosed, although SpendMend’s founders and managers retained “a meaningful ownership stake in the business,” according to an announcement of the investment.

“Through our partnership with the Sheridan team, we look forward to accelerating the growth of SpendMend and further developing our capabilities and overall value proposition as it relates to the healthcare industry,” stated SpendMend President Rob Heminger.  Miller, Johnson, Snell & Cummiskey PLC served as the legal adviser for SpendMend, which worked with Grand Rapids-based advisers Charter Capital Partners.

Sheridan Capital was advised by the law firm of Katten Muchin Rosenman LLP. Fidus Investment Corp. and Cadence Bank provided debt financing for the transaction.
“As the market leader in health care audit recovery, SpendMend’s services help health care executives, operators and providers navigate an increasingly challenging macro-economic environment of reimbursement pressure and rising organizational costs,” said Jonathan Lewis, managing partner at Sheridan Capital. “Cost containment is and will continue to be a high-priority focus in health care, and SpendMend plays a critical part in helping organizations find and establish long-term operational sustainability.”

Sheridan Capital Partners focuses on leveraged buyouts in the health care and consumer industry. It specializes in U.S. and Canadian companies with enterprise values between $25 million to $150 million.

“Sheridan’s sector focus and ability to bring both relevant experience and immediate value to our organization was undeniable,” stated SpendMend CEO Dan Geelhoed.  more

Private equity deal positions Grand River Aseptic Manufacturing for growth

November 26, 2017 - MiBiz

Grand River Aseptic Manufacturing Inc. was struggling in late 2010 when a group of West Michigan investors put up $5 million to acquire the company’s assets.

The initial investment seven years ago put GRAM onto the right trajectory. The company began attracting clients, secured additional capital, and over the years grew to more than $20 million in annual sales with a workforce of 160, nearly three times that of just a few years earlier.

Now a fast-growing contract developer and manufacturer of injectable drugs for pharmaceutical companies, GRAM is entering a new stage. Investors this month sold a majority of the company to private equity firm Arlington Capital Partners of Chevy Chase, Md.

The investment recapitalized GRAM for expansion and continued fast-paced growth.

“As many people in West Michigan know, it wasn’t an easy start for the company and it took a while to get its feet under them and gain some traction,” said John Kerschen, the managing director at Charter Capital Partners, a lead investor that retained a minority interest in GRAM.

“We’re happy to make money and have success as investors, of course, but it’s a really heartwarming story in terms of taking something from almost nothing to a nice, sustainable business,” Kerschen said. “GRAM would not be here if it weren’t for this collection of investors from around West Michigan or the state. It was a good collective effort.” more

Crystal Flash acquires Kalamazoo fuels distribution company

September 25, 2017 - MiBiz

Crystal Flash, an employee-owned fuels distribution company, continues its buying spree. The Grand Rapids-based firm said today that it had acquired Knapp Energy Inc. of Kalamazoo, a distributor of gasoline, diesel, home heating and lubricants with more than 900 customers, according to a statement. Crystal Flash expects to retain all of Knapp’s employees in the deal, which was finalized last week. Terms of the deal, Crystal Flash’s eleventh acquisition since 2011, were not disclosed.

Grand Rapids-based Charter Capital Partners advised Crystal Flash on the transaction.

“As we continue to expand our footprint, joining with companies closely align to our purpose and values is very important,” President Tom Olive said in a statement. “Our shared backgrounds as independent fuel distributors committed to exceptional service makes the Knapp acquisition a natural fit.” more

Investment banking firm advises on UK deal

August 25, 2017 - Grand Rapids Business Journal

The Grand Rapids-based investment banking firm Charter Capital Partners said yesterday that London-based ACM Group, or Alpha, whose management team works out of Grand Rapids, has agreed to sell technology, intellectual property and customer assets to the London-based gaming company Playtech. Charter Capital Partners assisted Alpha with the transaction.

The acquisition includes an up-front payment of $5 million, two staged payments based on the EBITDA of 2017 and 2018 and contingent consideration based on a 5.2 multiplied 2019 EBITDA, with total consideration capped at $150 million.

“We are pleased to be part of the Playtech family,” Alpha CEO Muhammad Al-Amin Rasoul said. “Their understanding of our business, married with their financial strength is a perfect fit for us. Most importantly, we will be able to better serve both companies clients with the additional capabilities afforded by this transaction.”

Dale Grogan, managing director of Charter Capital Partners, said Alpha is an "excellent example of the great businesses that are built in Grand Rapids. The entire Alpha team, based literally all over the globe, represents the very best in business diversity, led by a dynamic Grand Rapids leadership team." more