2018 ACG M&A All Stars
The Association for Corporate Growth Detroit Chapter and DBusiness magazine honor the 11th annual winners.
DBusiness magazine partnered with the Association for Corporate Growth Detroit Chapter to honor its recipients of the 11th annual M&A All-Star Awards for 2017 activity. Winners were recognized at an event on April 10 at the Townsend Hotel in Birmingham.
Deal of the Year Under $50M // Deal of the Year Over $50M // Adviser of the Year // Dealmaker of the Year // Rising Star: Andrew Dickow // Investment Banking Firm of the Year // Rising Star: Candice C. Moore // Lifetime Achievement Award
Peninsula Capital Partners, Detroit
Scott Reilly, President, CIO
Steven Beckett, Partner
Why Peninsula Capital Partners is the ACG Deal of the Year under $50M
The twists and turns of Detroit-based Peninsula Capital Partners’ acquisition of Allivet, a digital pet supply and pharmacy retailer near Miami, were akin to navigating a road rally up a mountain pass. The challenges included the fact that the transaction required the transfer of licenses in each state, along with the complexity of meeting new e-commerce requirements from Google and other search engines.
“It was like playing the Whac-A-Mole game, where every time you thought you had an issue addressed, another one popped up,” says Steven Beckett, a Peninsula partner who worked with his colleague, Scott Reilly, president and chief investment officer. “It took our team six months to complete the transfer and get the final sign-off on the needed certifications.”
Given the transaction was an “off-market deal,” there was no intermediary such as a broker or an investment who could help flag some of the issues that emerged during the acquisition of Allivet by Peninsula Fund VI.
To help close the deal, Peninsula brought in Foley and Lardner, a law firm in downtown Detroit, as its deal adviser. “The regulatory aspects made this transaction especially challenging, as an overlay to the normal hurdles in pulling together the deal documents (as well as) the debt and equity package,” says Steve Hilfinger, Detroit office partner at Foley and Lardner.
Looking back, Beckett says the acquisition team had to adjust the deal multiple times during the course of closing. “In a heavily regulated industry, never assume that the person you’re buying the company from is up to speed on transfers of ownership,” he says. “My other piece of advice for this type of deal is to bring in the legal talent early.”
Honorable Mention: Stratford-Cambridge Group’s acquisition of Custom Equipment
Huron Capital Partners, Detroit
Brian Demkowicz, Managing Partner
Sean Roberts, Partner, Private Equity
Why Huron Capital Partners is the ACG Deal of the Year over $50M
Detroit-based Huron Capital Partners’ acquisition of a majority interest in Hansons Holdings, a home renovation company in Troy, wasn’t a simple transaction. Founded in 1988 by Brian Elias, the company grew steadily throughout Michigan and is now one of the top 10 providers of home repair and renovation services in the nation.
“Brian was looking at succession and estate planning, and we both wanted to take the business to the next level with his management team,” says Brian Demkowicz, managing partner of Huron Capital, who worked with Sean Roberts, partner, private equity. “It was good timing, because in January 2017 we completed the investment round in our flagship fund, Huron Fund V, for $570 million.”
The deal with Hansons closed in October and, along the way, Huron Capital acquired American Exteriors, a large home renovation business in Denver that has eight operations spread throughout the West and Mountain West. To meld the two businesses while expanding Hansons into new markets in Michigan and other Midwest markets, Demkowicz and Roberts turned to Steve Silver, an operating partner at Huron Capital and former CEO of Empire Carpet in Chicago.
Tapping Silver’s expertise in expanding Empire Carpet from a local player to the leading marketer and installer of residential replacement flooring in the country was a natural fit in taking Hansons to the next level, Demkowicz says.
“When we first worked with Brian, we both felt there were a tremendous number of synergies to grow organically and acquire similar businesses that could benefit from the Hansons sales and branding model,” Demkowicz says. “When you add in Steve Silvers, we have a tremendous team that can identify leads and grow the business nationally, with the goal of making Hansons the No. 1 brand in the country under that brand name.”
Honorable Mention: Teijin Holdings USA Inc.’s (subsidiary of Teijin Ltd., Tokyo) acquisition of Continental Structural Plastics Holding Corp.
Plante Moran, Southfield
Michele McHale, Partner
Why Michele McHale is the ACG Adviser of the Year
Michele McHale might have had a second life as a circus performer, juggling paper lanterns in bright sunlight amid gale force winds. Last year, as a partner at Plante Moran in Southfield, she was engaged in 70 deals, eight of which totaled $141 million in combined revenue at Michigan-based private equity firms. Most of the transactions centered on the acquisition of physician and dental practices, along with manufacturing and service-related firms.
“Last year was the busiest I’ve been since I joined Plante Moran in 2006, and the reason is twofold,” she says. “There was increased activity in the market, and there was a lot of money to put to work for our clients. Our practice is becoming more well-known, and we have increased brand awareness in serving the middle market. There (are) a lot of sellers coming to the market, as well. I think this year we’ll be even busier.”
At times, McHale says it’s challenging to work with family-owned firms that are looking to sell their operations, seek out a strategic partner, or acquire a competitor. She also has spent considerable time understanding the nuances and complexities in sectors such as health care, which has multiple moving parts between hospitals, medical centers, regulatory agencies, physicians, nurses, medical equipment manufacturers, and pharmaceutical organizations.
“Most entrepreneur and family-owned businesses don’t have external recording requirements, so the accounting practices can be less sophisticated,” McHale says. “We have a good track record of unravelling their accounting records and figuring out what they’d look like post-acquisition, using standard accounting principles. By working with the clients, we help them understand the extra work that’s required can enhance the value of their companies. What’s also changing, of late, is that more companies are being added to an original acquisition to help scale a platform. That makes things more complicated, but also more rewarding.”
O2 Investment Partners, Bloomfield Hills
Jay Hansen, Co-Managing Partner
Todd Fink, Co-Managing Partner
Why O2 Investment Partners is the Dealmaker of the Year
O2 Investment Partners in Bloomfield Hills is coming off its best annual performance on record in 2017 , having closed on a $110-million committed fund, selling three portfolio companies, and adding six acquisitions. Founded in 2010, and drawing on 16 years of managing family office private equity investments in metro Detroit, O2 Investment Partners works with several high-net-worth family fund partners in targeting companies that have a “defensible niche.”
Once a niche is identified — such as a unique product, component, or technology — O2 acquires and adds the respective company to its portfolio, seeks to expand and scale the business over a five-year period by installing professional management personnel who are experts in a given field, and participates in the strategic, lending, M&A, operations, and growth of the enterprise without being “heavy-handed.”
Given its family investment roots, Todd Fink, co-managing partner of O2, says the firm is “a kinder, gentler investment fund” among its portfolio companies. “Because we don’t have institutional investors, we can be more flexible and be true partners with our portfolio companies, rather than having a top-down management style,” he says. “The companies appreciate that, and our family focus has helped attract some very talented investment professionals from New York and Chicago.”
The firm invests in an array of industries, including manufacturing, niche distribution, and select service and technology businesses. For example, O2’s investment in Greco Aluminum Railings in Windsor, which was focused on the Toronto market, where it was historically dominant and generated 90 percent of its annual sales, transformed the business. By opening a U.S. sales office, Greco expanded rapidly and O2 was able to sell the company for a sizeable profit.
“We have two deals now under letter of intent, and 2018 looks to be a big year for us,” Fink says. “We take a team approach to everything.”
Greenwich Capital Group, Birmingham
Andrew Dickow, Director
Why Andrew Dickow is an ACG Rising Star
Andrew Dickow brought a lot to the table two years ago when he joined Greenwich Capital Group, a middle market investment bank in Birmingham, as a director. An expert in food and beverage operations, Dickow had worked at General Mills Inc. in multiple capacities in the United States, Argentina, and South Africa. He also owns a minority stake in Pop Daddy Popcorn in Whitmore Lake, and co-owns five restaurants in metro Detroit with his brother, Randy.
“I learned all facets of how a major corporation like General Mills operates, and with my F&B expertise, I tell my current and future clients that I know the industry because I’m in the business myself,” says Dickow, who specializes in M&A on both the sell side and buy side. He also advises clients through recapitalizations, leveraged buyouts, business valuations, and financial analyses.
“When I joined Greenwich it was still a young business, having been founded in 2015, and even when I joined we were still getting the name out in the marketplace,” Dickow says. “Over the last two years, our team has grown stronger, our deal flow has increased significantly, and the size of our deals has increased. Now we have a lot of momentum, which sets up really nicely for expanding the business.”
Angle Advisors, Birmingham
Cliff Roesler, Co-Founder and Partner
Kevin Marsh, Co-Founder and Partner
Why Angle Advisors is the Investment Banking Firm of the Year
Last year was the second best on record for Angle Advisors in Birmingham, having closed on 16 deals that, combined, totaled $840 million in transaction enterprise value. Overall, Angle Advisors worked with 25 other professional firms based in Michigan — including law firms, accounting firms, lenders, environmental consultants, and specialist due diligence providers — to consummate its 2017 transactions.
What’s more, several of the deals were international in scope, including companies with significant operations in Mexico, Canada, Germany, and China. “We’ve been doing more and more international deals, and to help facilitate those transactions we have 18 management professionals on our team who, combined, have eight different language fluencies,” says Cliff Roesler, co-founder and partner of Angle Advisors. “Plus, we have an office in Germany and in China, and we have another partner in Spain.”
To help round out its operational team, last year Angle Advisors added a managing director focused on energy, oil, and gas, along with three staff members. One recent posting for an analyst position drew more than 450 applications from around the country. “For oil and gas, we were finding that with more manufacturing clients that do work in the vehicular space, they had an overlap in other sectors like oil and gas, as well as industrial products,” Roesler says. “We’ll be hiring more professionals this year.”
Last year, Angle Advisors kept its internal record of consummating at least one deal with a Chinese buyer (the firm had three such buyers in 2017). In turn, 80 percent of the firm’s overall transactions had strategic buyers — typically the hardest to engage, yet offering the highest return values. “It’s a bit easier to find strategic buyers in the U.S., but in China it’s very difficult to find them,” Roesler says. “It’s not like they’re waving a flag. You have to find them, engage them, and bring them to the finish line.”
Dykema, Bloomfield Hills
Candice C. Moore, Associate
Why Candice C. Moore is an ACG Rising Star
Multitasking comes easily to Candice C. Moore. A native of Inkster, Moore earned an engineering sciences degree at Michigan State University. Following graduation, she was hired by Owens Corning in Albany, N.Y. During her six years working in engineering and operations management, she earned her MBA at Syracuse University.
Returning home after working at Owens Corning’s headquarters in Toledo, she launched a home staging business and enrolled in Wayne State University’s law school. “I sold the home staging business after three years, and once I completed my law degree I started working for Dykema (in Bloomfield Hills),” Moore says. “One of my strengths is being super organized, which can drive my husband crazy.”
Last year, Moore worked on a dozen deals, including Detroit-based Huron Capital Partners’ acquisition of Hansons Holdings, a home repair business in Troy. “I really enjoy working on M&A deals,” she says. “The Huron Capital acquisition had so many moving pieces, where you’re dealing with experts in our firm and outside parties. You have to stay on top of everything, because if a small piece is overlooked, you don’t want it to bite you later.”
Williams, Williams, Rattner and Plunkett, Birmingham
R. Jamison (Rick) Williams Jr., Managing Partner
Why R. Jamison (Rick) Williams Jr. earned ACG's Lifetime Achievement Award
A corporate law attorney for 40 years, Detroit native R. Jamison (Rick) Williams Jr. says he fell in love with buying, selling, expanding, and enhancing businesses. Working with Avenir Cos. and the McDonald Agape Foundation, Williams has acquired, merged, closed, or sold more than 50 companies.
“I graduated from law school in 1966 and spent four years in the U.S. Navy, and when I started out with the corporate finance department at Smith Barney in New York City, I had a revelation,” says Williams, founder and managing partner of Williams, Williams, Rattner, and Plunkett in Birmingham. “I was in the bullpen as a young guy surrounded by MBAs, and it was way before the days of computers. I had a calculator on my desk, and as I worked there I fell in love with putting deals together.”
After returning to Detroit in 1973 to open the law firm, in the 1980s Williams and other investors formed private equity groups and investment firms to acquire and enhance businesses. With his own money, along with that of other investors, Williams says his strategy is to acquire smaller companies with growth potential, provide needed resources, enhance the management team, and “stay at the 10,000-foot-high level so I’m not micromanaging things.”
Apart from his law career, Williams and David DiChiera, former general director of the Detroit Opera House, worked tirelessly to save the institution from declaring bankruptcy. The opera company had taken on significant debt to fund several capital projects, including the construction of a parking deck, prior to the 2008 global financial crisis.
“Hat in hand, David and I spent several months going around to different investors, and we wound up raising $8 million,” says Williams, chairman of the Michigan Opera Theatre. “Then we cut a deal with the banks and took $16 million in debt down to $4 million. That was my full-time job for that period, and I’m glad it was successful because the opera house was an institution well worth saving.”