Deal of the Year Over $50M
Paul Meloche
President Fori Automation Shelby Township
Why Fori Automation Inc. is the ACG Deal of the Year Over $50M
When Bernd Koerner — the longtime majority owner and former CEO of Fori Automation Inc. in Shelby Township — decided to sell the company, he directed the management team to find a strategic partner in the Midwest that shared the same values and synergies.
“Bernd was emphatic that the buyer come from the Midwest, and that they have the same vision and growth strategy that we have,” says Paul Meloche, who took over as CEO of Fori Automation in January from Mike Beck. “We also wanted a buyer that was well-capitalized to make future investments in the electrified space.”
Approximately a year after an initial letter of intent was signed by Lincoln Electric Holdings Inc. in Cleveland, the $427-million acquisition of Fori Automation closed in December. Lincoln Electric is a global leader in the engineering, design, and manufacturing of advanced arc welding solutions, automated joining, assembly and cutting systems, and plasma and oxyfuel cutting equipment, and has a leading global position in brazing and soldering alloys.
While the due diligence period was fairly straightforward, Meloche says there were some challenges. “Lincoln is a large global publicly traded company that has a large due diligence team with a deep bench, and we had three to four people in our inner circle who were managing the business full time while overseeing the transaction,” he says.
To help close the deal, Fori Automation worked with UHY Corporate Finance, which served as the investment banker, with legal services provided by Butzel Long in Detroit. On the Lincoln side, KPMG handled the financial diligence, while Cleveland-based BakerHostetler oversaw legal matters.
“The deal was a strategic play by Lincoln to become a major player in the electrified space by acquiring a capability that would take them years to develop internally,” says W. Patrick Dreisig, a shareholder at Butzel. “Fori represents the best of what creative, innovative entrepreneurs can accomplish where large, well-capitalized publicly traded companies sometimes fall short.
“Lincoln filled the bill on this, and made it possible for our client to feel good about the sale and the future job security of all of its employees. Although certainly not an Apple or Google type deal, this deal nevertheless represents a major high-tech deal in our local economy.”
Since the closing, Meloche says Fori Automation has seen increased orders and added skilled personnel. In turn, the deal allowed the company to expand outside its automotive client base, where it’s a leading designer and manufacturer of complex, multi-armed automated welding systems with an extensive range of automated assembly systems; automated material handling solutions; automated large-scale, industrial guidance vehicles; and end-of-line testing systems.
“Lincoln allows Fori to expand into other industries and cross-sell into their customer base,” Meloche says. “It’s a win-win all the way around.”
Dealmaker of the Year
Martin Stein
Managing Director for Blackford Capital Grand Rapids
Why Martin Stein is the ACG Dealmaker of the Year
Martin Stein, founder and managing director of Blackford Capital in Grand Rapids, was 29 years old when he acquired his first company, Quality Imaging Products in Los Angeles. He sold what was a remanufacturer of toner cartridges four years later for a healthy profit.
After several more transactions in the aftermarket imaging supply sector, the Pontiac native returned to his home state and set up operations in Grand Rapids, where he opened Blackford Capital in 2010. “I noticed right away there wasn’t a lot of M&A activity, but slowly yet surely investors came together and the industry became larger,” Stein says.
Part of dozens of deals while working in California, the marathon cyclist long desired to raise the stature of middle-market private equity activity in his home state.
Today, Blackford Capital operates seven portfolio companies that, combined, generate more than $550 million in annual revenue. That’s all part of a career that spans more than 50 acquisitions, investments, recapitalizations, and exits that together are worth $750 million in transaction value.
“The team we have at Blackford combines strategy and culture, but we always say culture beats strategy on any given day,” Stein says. “We work closely with our portfolio companies and ensure we position them to prosper, regardless of what happens. That comes from the glue we have working as a team. We feel good about what we do, and that translates across what we see across the state. We may not be as big as New York, Los Angeles, or Chicago, but Michigan is growing and punching above its weight.”
Experience helps, as well. When Blackford Capital’s portfolio company, Aqua Leisure, acquired INYO Pool Products in April 2022, Stein was in his element, having been active in the outdoor recreation space. Aqua Leisure, which was purchased in January 2021, also acquired Airhead Sports Group, a leader in marine towable watersports and winter leisure products.
“We were selling to brick and mortars like Costco, Amazon, and Walmart, but we had a very strong presence online,” Stein says. “After we added INYO, we assessed everything post-COVID-19, from what would happen with remote work to what was going on in the global supply chain, and much more.”
To streamline deliveries from southeast Asia, Blackford Capital relied on its 50-employee team at Greyland Trading Ltd. in Hong Kong. “We worked together to make sure we had the supplies we needed, that we made the products in an efficient manner, and we made sure the products were shipped on time,” Stein says. “We even manage the inventory when it’s on the water. As a result, we now have a 99.5 percent successful shipping rate.”
Deal of the Year Under $50M
Jason King CEO
Adam Webber CFO
John Heard CSO
American Adventure Holdings Bay City
Why American Adventure Holding’s Acquisition of Ocean Canyon Properties is the ACG
Deal of the Year Under $50M
When American Adventure Holdings in Bay City, which owns and operates RV resorts, sought to acquire a competitor three years ago, they didn’t expect the transaction would be so challenging.
Consider the lead financial institution for the acquisition, Frankenmuth Credit Union — which had an existing relationship with American Adventures — was joined by 27 other credit unions and two banks. To help shepherd the transaction to the finish line and allow the management team to oversee the due diligence while running the business, Element 22 was named a deal adviser.
As the financing was being lined up, one of the stakeholders of Ocean Canyon, which operates eight RV Resorts in the South, passed away. “Once the stakeholder’s family settled the estate, they returned to the deal,” says Jason King, CEO of American Adventures. “In addition, some of the parks we were acquiring were located in hurricane alleys, and some had sustained damage, so we had to negotiate the anticipated repair value.”
In turn, the lenders required individual appraisals of the 17 resort properties owned by the two enterprises. “That takes time, because you have to find a specialized appraiser,” King says. “We also had to deal with some environmental issues with the Tennessee Valley Authority and the Army Corps of Engineers, which we were able to do successfully.”
While the cost of the acquisition is private, King says the complexity of working with multiple lenders and properties required a well-organized team that today operates resorts in Michigan, Alabama, Texas, Oklahoma, Missouri, Louisiana, and Arkansas. Overall, there are 3,396 camp sites and rental accommodations offered in multiple resort settings for 27,000 members, many of whom own their own RV.
It helped that King had plenty of institutional knowledge. His grandfather, John, built up an RV resort business that he later sold, while his father, Greg, opened the first Outdoor Adventure park in Standish, near Saginaw, in 1995 (American Adventure is the parent company).
One benefit since the deal for Ocean Canyon closed in May 2022 has been a bump in local tourism. “We’re bringing people to Michigan who otherwise might not have come here,” says Adam Webber, CFO of American Adventures. “When it’s hot and humid in the South, our members can travel north and enjoy our summer weather.
“When you come to one of our properties, you can pop up a tent and have a campfire, park and set up your RV, or rent a frame cabin. There’s indoor and outdoor pools, lakes, hiking trails, and all kinds of activities for kids. Plus, they can make new friends. We offer everything from rustic to glamping experiences.”
Rising Star
Arjun Murthy
Director Cascade Partners Southfield
Why Arjun Murthy is the ACG Rising Star
As he earned a finance degree from Michigan State University and an MBA from the University of Michigan, Arjun Murthy knew he wanted to be involved in M&A and investment banking. But before becoming a director at Cascade Partners in Southfield, he learned as much as he could working for PNC in corporate institutional lending before joining Amherst Partners in downtown Birmingham, where he first worked as an analyst before being named a director.
In 2019 he was named a senior manager at TriMas Corp., a large, diversified manufacturer of engineered products in Bloomfield Hills. A year later, he joined Cascade Partners and immediately set to work on a complicated M&A deal that required pulling together what he refers to as “a two-for-one deal.”
“We worked with BHG Ventures, a private investment firm in Southfield, on their acquisition of two leading online sporting goods and equipment retailers — Sportsman’s Guide and The Golf Warehouse,” Murthy says. “We initially focused on the Sportsman’s Guide, but then brought in The Golf Warehouse.
“We kept the same closing time of 120 days, so we underwrote the deal and raised all the financing for it. We were then asked by BHG to be on the board of Crecera Brands in Minneapolis/St. Paul, which oversees several omni-channel retailers, including these two companies. It’s been quite a ride.”
Sportsman’s Guide is a large outdoor sporting goods, hunting, fishing, and camping gear accessories retailer founded in 1976, while The Golf Warehouse started in 1998 and has become a leading e-tailer offering brand names and private label products in the golf, baseball, and softball markets.
“We were the only buyer that approached the seller of the two brands in a two-for-one deal,” Murthy says. “My job was to be like a quarterback. You bring everyone (in a deal) together, you shepherd everything along, and work in the best interest of our client.”
With the acquisition, the terms of which were not disclosed, BHG Ventures plans to capture the accelerating tailwinds within the fitness and recreation industry, particularly the growing demand for high-quality, easy-to-access sporting goods and equipment.
At 32 years old, Murthy is the youngest director at Cascade Partners, an investment banking and private investment firm serving entrepreneurs, businesses, family offices, and investors active in the middle market. In addition to leading the firm’s intern program, he serves on ACG Detroit’s Corporate Development Alliance Committee.
“We have a good team, and we’re very well-organized, which helps when you’re in the thick of a deal,” Murthy says. “I couldn’t be happier working in the M&A and investment banking space.”
Advisor of the Year
Pete Roth
Partner Varnum Birmingham
Why Pete Roth is the ACG Advisor of the Year
Working on more than 30 transactions last year with an aggregate transaction value approaching $1 billion, Pete Roth, a partner at Varnum, where he splits time between the law firm’s Birmingham and Grand Rapids offices, says some deals require complex financial agreements among multiple countries, while others are more about preventing shouting matches between opposing parties.
“In one instance, we were working with a family-owned business, and some members didn’t like each other and they wound up suing each other,” Roth says. “The resolution was to sell the business and hand out the proceeds to the members. It was a fairly large private equity deal that monetized the transaction.
“Sometimes it’s better to have more counsel than to have two brothers yelling at each other. It was better to work through the respective teams, and each brother had their own lawyer, and the overall company had their lawyer. You take the emotion out of the deal by using third parties. I doubt the brothers could have done it on their own.”
On the international front, primarily in Europe, Roth says transactions involving companies from the United States introduce additional layers of legal and financial complexity with regard to M&A laws governing foreign entities. In one instance last year, he represented Granger Energy Services in its sale of 16 landfill gas-to-energy sites across six states to an Australian country.
Closer to home, Roth — whose practice areas include business and corporate, M&A, and private equity — represented a Michigan entrepreneur in the purchase of Schuil Coffee Co. in Grand Rapids.
Roth also has extensive experience with automotive OEMs, along with Tier 1 suppliers and parts-makers further down the supply chain.
His representation has included disputes between OEMs and suppliers, M&A and joint venture transactions, contract negotiations, terms and conditions analysis, price increase “hostage” situations, and securing supply in bankruptcy and distressed situations.
“The sweet spot for our transactions is $150 million, but you can’t do 30 deals a year all by yourself. You need a great support team that’s always looking out for the best interest of everyone,” Roth says. “We keep costs in close mind, too.
“In some instances I do the high-end negotiating and client counseling, while junior partners draft the documents and associates do the due diligence. In this way, we provide lower overall rates to the client.”
Looking back at last year, Roth says M&A was active, but higher interest rates “made things a little more choppy. The pipeline is a little slower, and it’s a tougher environment. It’s harder to get financing and tougher to sell businesses, but we’re still seeing a lot of deal flow.”
Investment Banker of the Year
Bryan Berent
Managing Partner Blue River Financial Group Bloomfield Hills
Why Bryan Berent is the ACG Investment Banker of the Year
At a time when deal flow in the M&A sector was hindered by high inflation and rising interest rates, Bryan Berent, co-founder and managing partner of Blue River Financial Group in Bloomfield Hills, says the firm had its best year ever in 2022. The middle market M&A advisory firm, which represents both buy-side and sell-side transactions, was founded 20 years ago.
Over the years, it’s developed an expertise across many disciplines including manufacturing, health care, and distribution, while cultivating specialties in software and industrial automation markets. Last year, Blue River completed 26 transactions — nearly double the deal flow from the previous year. Despite current economic headwinds, Berent says the firm will close 35 transactions this year.
“One reason we’re successful is that we have open and honest conversations; nothing is isolated,” Berent says. “Everyone collaborates, including in our hiring process. To keep growing, we’re adding professionals, and we continue to invest in technology.”
At the same time, Blue River is reaching a wider audience. “We’re building a better brand,” Berent says. “We hired a really good marketing director, which has led to more external branding. We do more press releases (than we did) before, and we’re on social media. We also had (just) one person leave in the past two years. It helps when people stick around. It builds momentum, and we’re not seeing people come and go.”
That consistency helped the 36-person team provide advisory services to several notable deals last year, including working with Prime Technologies Inc., a provider of calibration management software, on its sale to TMA Systems, a portfolio company of Silversmith Capital Partners, a Boston-based growth equity firm with $3.3 billion of capital under management.
Mark Simner, CEO of TMA Systems, says the deal, which was announced in October, delivered on several goals, including a reduction in organizational costs, growth in the return on assets, and improvements on “overall time to value.”
In a separate deal, Blue River advised Grommet, an e-retailer and portfolio company of ACE Hardware, in its recent sale to GiddyUp, a performance marketing network that drives online sales among hundreds of popular brands.
“Over the last two years, we’ve been working with ACE Hardware to assist them with their spin-off and acquisition strategies,” Berent says. “Grommet was one of their spin-offs. It was a nonstrategic asset, and we were happy to take it to market. We found a number of interested parties and, as it turned out, Grommet was a very good fit for GiddyUp. Now ACE Hardware can look to invest in other opportunities, such as the service industry.”
Lifetime Achievement Award
Scott Eisenberg
Managing Director, Financial Advisory Services
Capstone Partners Birmingham
Why Scott Eisenberg Earned ACG’s Lifetime Achievement Award
While most people move around throughout their career, Scott Eisenberg has been working in the same office building in downtown Birmingham for 28 years — first as a partner with Amherst Partners and, more recently, as managing director of financial advisory services at Capstone Partners.
In a career that includes more than 75 investment banking and 200 financial advisory assignments in manufacturing, services, financial services, and technology, Eisenberg has seen his share of unique deals. One transaction that stands out is the sale of a waste energy business out of receivership in Freeport, southeast of Grand Rapids.
“The company was an anaerobic digester — essentially they would take food waste product and put it in silos and cover it with enzymes that digest the food, which in turn creates methane that powers a turbine, and the excess energy gets sold to the grid,” says Eisenberg, an international board member of ACG and past president of ACG Detroit.
“They had a valuable contract with Consumers Energy, but the company’s operation was shut down due to a number of factors. However, the contract was valuable and required that the company produce at least some electricity over a 12-month period. If they didn’t produce electricity over that time, they would be in default of the contract.”
Knowing a sale to a waiting buyer would span more than a year, Eisenberg and his team approached the secured lender of the business, a bank, about restarting the operation. Over the span of 10 months, Eisenberg searched for an outside business to bring in to get things going, but he didn’t find any takers.
“Finally we went back to the bank, and ultimately that’s the last thing a bank would allow to happen. But we were persistent, got all of the necessary insurance and approvals, and we started up the facility. We generated enough electricity to light a lightbulb for more than 30 seconds, and we saved the deal.”
Across his career, Eisenberg has served as an international board member of the Turnaround Management Association and was past president of TMA Detroit, past president and board member of the Detroit Chapter of Young Entrepreneur’s Organization, past president of the American-Israel Chamber of Commerce of Michigan, and past chairman of the Automotive Supplier Committee of the Michigan Association of CPAs.
“When my wife and I moved here from Chicago in late 1984, I knew no one,” Eisenberg recalls. “I vividly remember watching the Super Bowl (in January 1995), where my team growing up, the Chicago Bears, won, but I was watching it with my wife and her grandmother. From then on, I vowed to volunteer for nearly everything just to meet people and get involved. I keep doing that to this day.”
