M&A/PE Roundtable: Advisers see strong M&A market ahead

January 6, 2019 - MiBiz

M&A professionals expect the dealmaking market to remain healthy in 2019. That’s one of the conclusions from a panel of executives MiBiz assembled to talk about West Michigan’s mergers and acquisitions sector. Roundtable participants expect to see greater due diligence on deals this year as economic growth eases. They’re also beginning to see more deals involving distressed companies and signs of pressure on high valuations.

Participating in the executive roundtable were:

  • Mike Brown, partner and managing director at Charter Capital Partners, a Grand Rapids-based investment banking firm

  • Jeff Helminski, managing partner at Auxo Investment Partners, a Grand Rapids-based private equity firm

  • John Pollock, managing partner at Ada-based private equity firm LV2 Equity Partners LLC

  • Peter Roth, partner at Grand Rapids-based law firm Varnum LLP, which sponsored the roundtable

  • Randy Rua, managing partner at NuVescor Group LLC in Grand Rapids and president of Rua Associates LLC in Zeeland

  • Eric Seifert, founder of Muskegon-based advisory firm Left Coast Capital Resources LLC

  • Jimmy TenBrink, director of business development at Grand Rapids-based Waseyabek Development Co. LLC, the non-gaming arm of the Nottawaseppi Huron Band of the Potawatomi

  • Don VanDine, regional vice president at Wells Fargo Bank in Grand Rapids

Here are some highlights from the conversation.

Ablative Solutions secures $77 million in largest known VC deal in Michigan

January 3, 2019 - MiBiz

Ablative Solutions Inc. secured $77 million in financing that ranks as the largest known venture capital deal ever in Michigan.

Netherlands-based Gilde Healthcare, which has an office on Boston, led the Series D financing round in Kalamazoo-based Ablative Solutions, which developed a catheter system to treat uncontrollable hypertension by deactivating nerves in renal arteries.

Petoskey-based BioStar Ventures, Michigan Accelerator Fund 1 in Grand Rapids, and Kalamazoo-based Novus Biotechnology Fund 1 co-led the VC round, which includes an unnamed strategic investor and several individual investors. The funding will take the company through late-stage clinical trials in the U.S. and Europe to prove the effectiveness of the treatment. more

Kimball Acquires David Edward

October 19, 2018 - Interior Design Magazine

Office furniture specialist Kimball has signed a definitive agreement to acquire David Edward, the family-owned manufacturer of upholstery and furniture targeting the corporate, health care, education and hospitality markets.

“We were inspired by the employees’ commitment to quality and their incredible tailoring skills,” says Kimball president Mike Wagner. “We will further invest in David Edward and build their brand by broadening their ancillary product portfolio.”

Additionally, Wagner expects to leverage David Edward’s expertise to expand Kimball’s range of seating and help fuel growth of the manufacturer’s Kimball Health assortment. more

Time to Act? Advisers tell clients to accelerate transaction timelines to take advantage of strong valuations

October 13, 2018 - MiBiz

Mergers and acquisition activity remained strong in West Michigan through the third quarter, as many sellers opted to go to market while they can still get a good price for their businesses.

Professionals in the M&A industry describe a clear seller’s market in which clients exiting their businesses often receive multiple offers from prospective buyers. Private equity firms and family offices remain active, competing hard for good deals, which is keeping valuation multiples up.

John Kerschen, president and managing partner of Charter Capital Partners, a Grand Rapids-based M&A firm that typically works in the lower middle market, attributes the private equity activity this year to the massive amount of “dry powder” in the U.S.

American private equity firms entered the year with a record $353 billion in dry powder, up 44 percent from 12 months earlier, according to an August report by the Washington, D.C.-based American Investment Council.

As private equity firms face deadlines to deploy their available capital, they’ve become increasingly active and competitive for deals, driving up multiples, Kerschen said.

“They have so much money and they have to get it deployed, so they’re willing to pay up,” he said. “There’s a sense of urgency to get transactions done.” more

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.