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Merging of Minds

Navigating and completing begins with assembling the right multidisciplinary team. From due diligence to closing documents, Warner Norcross & Judd has the expertise and experience to handle every aspect of your deal. Let Warner’s team work for you. We make M&A manageable.

Here are some recent deals where we’ve been privileged to provide legal counsel:

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Learn more about our M&A practice and other representative experience at WNJ.com/M-and-A

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WELCOME

.L. Polk & Co. had been a family-run firm in nities to bolt on new categories to bring to our retail- metro Detroit for the past 143 years. But 2013 ers,” CEO Joe Papa recently told Wall Street ana- Rwas the year that Stephen Polk decided that lysts. the right move to ensure the future of the company, Perrigo wasn’t the only serial acquirer among its and financial security for his family, was to sell. publicly traded peers in west and mid-Michigan. Add The $1.4 billion deal turned out to be a great play Stryker Corp. (Kalamazoo), Neogen Corp. (Lansing) for acquirer Englewood, Colo.-based IHS Inc. to ex- and Universal Forest Products Inc. (Grand Rapids) to pand its data offerings (with the Polk Carfax product) the list of outstate public companies that did at least and dominate its market. three acquisitions last year. The Polk deal underscores a few takeaways from Even so, Michigan’s 2013 M&A activity showed Michigan’s M&A world these days. fewer deals than 2012, but slightly more money For one thing, Polk has 1.4 billion reasons why changing hands. this is a seller’s market. For a few more, the story by Oddly, the world showed the op- reporter Mark Sanchez on Page 9 underscores how posite, as Gary Anglebrandt reports on Page 21. deal terms have changed in favor of those selling There were more VC deals involving Michigan com- businesses. panies in 2013 compared to the year before, but the The Polk transaction also reflects the trend that dollars flowing into companies was markedly lower. strategic buyers aren’t looking to expand globally as With 2013’s level of VC investing looking more like much as they are aiming to dominate a market or an 2011, some say the blockbuster in 2012 was a fortu- industry. IHS, as Dustin Walsh reports on Page 6, itous flash in the pan. made the deal to enhance its offerings with U.S. deal- “We had an uptick, and maybe it’s normalized ers rather than move into other global territories. now,” Peter Roth, a partner at Grand Rapids-based This issue of “The Michigan Deal,” another col- law firm Varnum LLP, told Anglebrandt for his story. laboration between Crain’s Detroit Business and Maybe this new normal is good, maybe not. In ei- MiBiz, covers the biggest deals of the entire state, not ther case, the past few years have seen the landscape just Detroit or Grand Rapids. The Big Deals List, change as more VC firms have set up shop here and Page 11, highlights $45 billion worth of transactions firms have scoured the state for deals statewide, including a few from the Upper Peninsula. in the automotive, medical device and other sectors. Deals involving automakers dominate the list, in- So even as the value and number of transactions cluding the acquisition of Group LLC’s re- rises and falls, the attention continues to grow. maining shares by SpA, as well as the sale of do- That’s a good deal for Michigan. mestic divisions of Ally Financial by General Motors Co. and the acquisition of some foreign Ally units. The deal atop the list, though, was neither auto- motive nor Detroit-centric. Over-the-counter drug- maker Perrigo Co., based in a rural west Michigan community outside Grand Rapids, bought Dublin, Daniel Duggan Brian Edwards Ireland-based Elan Corp. for $8.6 billion in a deal moti- Managing editor/ Editor and Publisher vated by global expansion, market dominance and custom and MiBiz tax savings. Perrigo also acquired three other compa- special projects nies in 2013 and continues to look for “more opportu- Crain’s Detroit Business

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ABOUT THE WRITERS Ⅲ Gary Anglebrandt is a Detroit-based writer and editor with more than 10 years of experience in CONTENTS journalism, corporate communications and English education. A native of Michigan, he M&A Deal News lived in South Korea for five years, editing English-language news Over the ‘hangover’ for Korean media 3 Banks are back in the game when it comes to 29 Mich. politicians love it; business outlets and covering the mergers and acquisitions. The current pace of community, not so sure. While the state’s Korean automotive lending at levels that investors haven’t seen for politicians may be totally enamored with equity industry for Automotive years is driven partly by regulations on private equity crowdfunding, some Michigan professionals who News. Since returning to investment and partly because deals are attractive. buy, sell and help raise equity capital for a living are Michigan in 2009, he sounding a bit more leery these days. has worked as an editor Domination game Sidebar: Crowdfunding spawns a sea of portals and freelancer for Crain’s Detroit Business Local companies focus dealmaking on market 6 and as a public relations ownership. Many Detroit-area companies sought Deal Briefs consultant. vertical deals allowing them to buy a key business line An overview of activity across the state or technology to dominate an industry segment. 31 covering the funds, startups and investors Ⅲ Tom Henderson has active in the state. been a reporter at High expectations Crain’s Detroit Business since 2005 and covers 9 Cash-rich buyers create seller’s market on Bits and Pieces banking, private equity, M&A scene. Terms of 2013 M&A deals have News from Michigan’s deal community venture capital, tilted in favor of sellers. 36 accounting, technology transfer and early-stage tech companies. A political science major Michigan Deal List: 2014 deals from Michigan State Mergers & Acquisitions A number of deals have been announced University, he previously 11 19 was a sports writer at See the deals: more than $10 million across already in 2014. Here are a few M&As likely to be on next year’s list. the Detroit Free Press, Michigan, representing $45 billion in deal volume. where he covered the Online exclusive: Search the database of deals at Detroit Red Wings and crainsdetroit.com. University of Michigan football. Ⅲ Mark Sanchez is a senior writer at MiBiz, Ⅲ AgriSight Inc. Known for its product, FarmLogs, covering the business of Venture Capital Web-based farm management software that helps health care, life farmers track data, Page 24. sciences, finance and 2013 good – but no 2012 Ⅲ Ablative Solutions Inc. Yet another medical small business. He has 21 Predictions for 2014: Increase in exits, device from a family with 250 patents and 16 25 years of experience in health care IT. The numbers for 2013 are companies, Page 25. west Michigan and does in, and they show Michigan partly fell in line with the Ⅲ Swift Biosciences Inc. Chemical reagents that a periodic business rest of the industry last year. Michigan deal volume prepare samples of DNA; has drawn $13 million in VC, segment on public radio was up 39 percent from 2012 to 2013, while dollars Page 26. station WGVU in Grand invested were down 57 percent. Ⅲ ProNAi Therapeutics Inc. Company raised a Rapids. The Royal Oak $12.5 million round, following a previous $20 million native and Grand Haven Investment-worthy companies for its cancer-fighting drug, Page 27. resident also has worked Ⅲ for the Grand Rapids 24 Startups that Michigan dealmakers are Delphinus Medical Technologies Inc. After 15 years Business Journal and watching of development, revenue may be coming, Page 27. The Holland Sentinel. Ⅲ Dustin Walsh is a reporter for Crain’s Detroit Business, covering manufacturing, automotive suppliers, the business of law and steel. He started at Crain’s in 2008 and From left: AgriSight’s Jesse Vollmar, Ablative Solutions’ Tim Fischell, Swift Bioscience’s David Olson, ProNAi’s covered the decline and Mina Sooch and Delphinus Medical’s Mark Morsfield. resurgence of the country’s largest manufacturing sector. Much of his coverage Design Copy editing Production expands into Wall Street Bob Allen Bob Allen, Tracy Balazy, Joe Wendy Kobylarz and the effect of money Boomgaard, Ed Bradley, Gary markets on Southeast Piatek and Beth Reeber Valone Michigan companies.

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GLENN TRIEST The private equity deal flow, especially in automotive manufacturing, is “better than I’ve ever seen it,” said Brian Marshall, Huntington Bank senior vice president and manager of commercial lending for the eastern Michigan region. Over the ‘hangover’ With banks again providing senior debt, deals on rise

By Tom Henderson done more easily to the acronym for earnings before in- and for more money terest, taxes, depreciation and amor- anks are back in the game because of the re- tization, a key reference point to when it comes to providing newed eagerness by structuring deals. senior debt for mergers and banks to write large “Banks are lending at levels we Bacquisitions, and Charlie checks. haven’t seen in years, and that’s go- Rothstein, for one, is glad. “The availability ing to be fueling the market quite a His Farmington Hills-based ven- of debt certainly bit,” said Brian Demkowicz, manag- ture capital firm, Beringea LLC, sold Rothstein made for a higher ing partner at Detroit-based Huron off one of its portfolio companies, sale price. That was Capital Partners LLC, year in and year Marquette-based Pioneer Surgical a very good exit for us,” said Roth- out the state’s most active private eq- Technology Inc., a maker of prosthetic stein. uity firm. “We’re even seeing feeding devices, to Florida-based RTI Biolog- “The availability of leverage has frenzies in the auction market for hot ics Inc. (Nasdaq: RTIX) for $130 mil- pushed pricing. Businesses are get- companies.” lion last June. ting sold for 10 times EBITDA, which It was a deal, he said, that was seems pretty rich,” he said, referring SEE PAGE 5 SPRING 2014 Page 3 FALL 2006 CDB Living In The D_New CD Magazine sized 2/28/2014 3:30 PM Page 1

congratulates the winners of the 2013 Accelerate Michigan Innovation Competition

With more than $1 million in cash and in-kind prizes, the Accelerate Michigan Innovation Competition is designed to highlight Michigan as a robust and vibrant venue for innovation and business opportunity.

Grand Varsity News Network is a Grand Rapids-based Web platform that makes it easy for high school athletic directors to manage social Prize communication with teams and the community, and automatically $500,000 generates media coverage for athletics in the process.

Covaron Advanced Materials is an Ann Arbor company that has created Second a patent-pending technology called Petraforge, a thermosetting material that can provide advanced physical properties comparable to advanced $100,000 ceramics but more durable, relatively low cost and able to use raw materials from industrial waste.

REL Inc. is the leader in the development of metal matrix composite Third (MMC) brake technology and products, with applications in the $50,000 automotive and motorcycle industries. These brakes are 60 percent lighter, leading to improved energy efÀ ciency and vehicle light-weighting.

Read about these and the other winners at crainsdetroit.com/accelerate.

PROUD SPONSORS PROUD SPONSORS PROUD SPONSORS PROUD SPONSORS PROUD SPONSORS PROUD SPONSORS PROUD SPONSORS

michiganbusiness.org 20140310-SUPP--0003,0005-NAT-CCI-CD_-- 3/5/2014 4:51 PM Page 2

FROM PAGE 3 and others to help with their acquisitions. “More bank lending Availability of capital, senior debt in Deal details here is part of the overall particular, was one factor that helped the story in Michigan,” said law firm Honigman Miller Schwartz and Deals in Michigan tracked by Crain’s Ritchie. “Michigan has Cohn LLP advise a firm-record of 150 and MiBiz become a much more at- transactions in 2013. tractive place to invest The number of deals was up only incre- in, with the revival of mentally over the 140 in 2012, said Honig- 101 $44.7 manufacturing, its R&D man’s private equity deals billion base, its engineering, its practice group leader, logistics. Michael DuBay, but the “We’ve done well in aggregate deal value Michigan breakdown Ritchie private equity. We climbed sharply, from Financial services: $16.1 billion (36 haven’t had hyper-growth, but we’ve had $4.5 billion in 2012 to percent of the total value of all deals), 15 steady growth. For us, the key isn’t the deal $8.2 billion in 2013, fu- transactions per se, it’s the ongoing relationship with eled by more senior Just $3 billion when the four deals the (private equity) customer,” he said. debt. involving Ally Financial Inc. are factored out The access to capital is fueling deals, “Senior debt was ab- Health care: $12 billion (26.7 said Mark McCammon, managing partner solutely critical to DuBay percent), 16 transactions for Strength Capital Partners LLC, a private- overcoming the hang- Just $3.4 billion when Perrigo Co.’s equity firm based in Birmingham. over from 2012. We were getting a lot of acquisition of Elan Pharmaceuticals is “There’s plenty of bank debt out there. deals done where we had four, five or six factored out It’s a seller’s market,” he said. “It’s very term sheets from senior lenders,” said competitive, especially for high-value DuBay, who said active lenders on Auto: $9.7 billion (21.7 percent), 22 companies. There is a lot of money chas- Michigan deals included J.P. Morgan transactions ing the very high-quality companies.” Chase, Comerica Bank, Huntington Bank Nonautomotive manufacturing and Birmingham-based Angle Advisors-Invest- and Wells Fargo & Co. industrial services: $1.7 billion (3.6 ment Banking LLC was the investment Brian Marshall, senior vice president percent), 23 transactions banker on 23 transactions last year, 18 of and manager of commercial lending for Dealing in Detroit them by the local office and five by its Huntington’s eastern Michigan region, German office. confirmed his bank was an active M&A Deals in metro Detroit tracked by Crain’s “On several of them, banks were willing lender. Detroit Business show fewer deals at a to lend more than the buyers were pre- “We’re seeing a lot of deal flow,” he higher total value than in past years. pared to borrow, which is a little unusu- said. “The private equity space is very In 2013, 77 deals in Southeast al,” said partner Cliff Roesler. active, specifically the automotive manu- Michigan had a total value of $29.8 billion. In two deals, the availability of bank mon- facturing space. It’s better than I’ve ever ey actually resulted in a sale to private equi- seen it.” In 2012, 95 deals had a total value of $27.5 billion. ty not getting done. The owners wanted to Marshall said the Columbus-based sell, but with so much money unexpectedly bank has a group of eight to 10 lenders In 2011, 70 deals had a total value of $19.3 billion. available, the management teams decided to who focus solely on private equity deals do a management and become the across the bank’s footprint in Michigan, company owners themselves. Indiana, Kentucky, Ohio, Pennsylvania Volcker Rule, part of the Dodd-Frank Jay Hansen, managing partner of and West Virginia. Wall Street Reform and Consumer Pro- Bloomfield Hills-based private equity firm Marshall said business owners who tection Act, they are now restricted to O2 Investment Partners LLC, said his firm didn’t want to sell at the bottom of the limiting their investments in private eq- bought three companies in the last year market during the recession are not the uity and hedge funds to 3 percent of their and a half, and all three deals involved a only ones who are selling now. capital. layer of bank debt. “I’ve got business owners saying, ‘I That’s a far cry from the past. According Hansen said that in the past, he typical- thought I had another 15 years to own to a Harvard Business School study, between ly would have used mezzanine debt to this business,’ or ‘I’ve had a child I want- 1983 and 2009, 30 percent of all investment fund his deals. Mezzanine lenders charge ed to turn the business over to eventual- in U.S. private equity firms came from higher interest rates because if a deal lat- ly, but I got a letter of intent out of the banks doing their own investing. er goes bad, they fall in line behind banks blue I just can’t turn down.’ I haven’t Comerica, for example, was an early in- when it comes to claiming assets. seen anything like this in the 20 years vestor in Huron Capital. While investing “We hope to close on another platform I’ve been doing this,” he said. in Huron funds can cause regulatory is- company in the first quarter,” Hansen said. One reason for banks to target private sues, bank president Michael Ritchie said “Senior lenders being more aggressive equity deals is that under the recent the bank is free to make loans to Huron have helped facilitate our transactions.” VIEWS ON THE STATE OF M&A

Daniel Minkus, a partner who manages the One positive, Minkus said, beyond an abundance Birmingham office of the law firm of Clark Hill PLC, of capital, is that coming out of the recession, deal said that while the combination of more bank credit makers on both sides are just happy to be able to and private equity money that needs to be invested get deals done now. made 2013 a strong year, there are still bumps in “There used to by paralysis by analysis. People the M&A road, particularly in the auto sector. were afraid to make a mistake and leave a dollar “There’s a tension between sellers who have on the table. We’ve gotten away from the feeling unrealistic expectations and a cyclical weariness by that you can’t pay that last penny or that you need investors who know that the auto sector is cyclical to make that last penny to get a deal done,” he and are worried about timing it right,” he said. said.

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Domination game Local firms focus dealmaking on market ownership By Dustin Walsh

xecutives leading post-reces- sion merger and acquisition deals spent much of the past Ethree years playing a high- stakes game of “Risk.” The objective: Assemble operations in strategic geo- graphical locales — go global — and dominate the competition. For certain kinds of companies, au- tomotive and otherwise, that strategy still makes sense. But other drivers to M&A involving Detroit-area companies in 2013 included more vertical deals — deals that allowed a company to buy a key business line or technology to dominate an in- dustry segment. Local players seem more focused on “owning a market” and buying up technolo- gy and access to market share, said Rajesh Kothari, partner at Southfield-based invest- Kothari ment banking firm Cascade Partners LLC. “Businesses have right-sized and stabilized, but organic growth continues to be challenging,” Kothari said. “We stopped seeing as many acquisitions in particular markets; they’ve been focused on market segments.” Manufacturing, auto and otherwise, is leading the push for vertical integration and technology dominance among some of the deals on the M&A list compiled by Crain’s and MiBiz. New technology is allowing these companies to capitalize on in- organic growth on the front end with hopes of organic growth in the future. SEE NEXT PAGE

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FROM PREVIOUS PAGE The trend continued into 2014 with VIEWS ON THE Visteon Corp.’s $265 million acquisi- Data, garage doors tion of JCI’s electronics unit. STATE OF M&A The acquisition cements a substan- drove deals tial electronics market share with Cliff Roesler, a partner with The bellwether Detroit deal in 2013 European and Asian customers. BMW Birmingham-based Angle was Englewood, Colo.-based IHS Inc.’s AG, Honda Motor Co. Ltd., Renault-Nis- Advisors- LLC, said sellers $1.4 billion acquisition of Southfield- san, PSA Peugeot-Citreon and Ford Mo- will have a good year in based R.L. Polk & Co. The payoff was tor Co. accounted for 72 percent of the 2014, as well. Polk’s fee-based used-car history former JCI business, which generat- provider, Carfax Inc. ed $1.3 billion in fiscal year 2013. Roesler said senior debt will In an August in- Bill Kohler, partner at Clark Hill PLC continue to be readily available in 2014. terview with in Detroit and co- Crain’s, IHS CEO chair of its automo- “We’ve got lots of things Scott Key said tive and manufac- percolating. We’ve got 27 adding the capabil- turing practice, assignments we’re working on, which is a lot. ity of Carfax to said the Visteon The sellers who survived the Great Recession are now being rewarded for surviving,” he said. IHS’ already-global and Gentex deals presence is para- are the poster chil- mount to its future dren for future Andre Augier, managing growth. M&A deals in auto- director of the Birmingham “(Polk is) only in motive, where investment banking firm of Key companies will add Quarton Partners LLC., said a percentage of Kohler dealers with all the analytics (Car- technological ex- a convergence of events fax) can provide, and we’re going to pertise to solidify a market segment. made 2013 a great year for continue to build that presence and “What made 2013 different is the fo- M&A, and promises to make penetration because we know the cus of adding technology capabilities 2014 just as good. market well,” he said. in line with strategic planning,” Private equity companies Key said Carfax is capable of Kohler said. “Technology this year that had either raised new reaching $1 billion in revenue in the and the years following is only going funds before the recession, U.S. market. to be an increasing factor in deals.” or finished fundraising during it, need to get Another example was the Septem- The speed of technological change that money invested so they can start bringing ber acquisition of Johnson Controls in the industry is a major concern returns to their limited partners. Estimates are Inc.’s Homelink product line by Zee- for global automotive CEOs, accord- that private equity firms in the U.S. have about land-based rearview mirror and cam- ing to PricewaterhouseCoopers LLP’s $1 trillion in funds they need to deploy. era-system supplier Gentex Corp. 17th annual global CEO survey, pub- And those who wanted to sell a company The $700 million deal provided lished in February. Nearly half of during or after the recession but didn’t want to Gentex with a vehicle-based system the respondents said they were con- sell at or near the bottom of the market are to allow drivers to remotely activate cerned about the how fast technolo- looking to cash out now. their garage doors and other home gy is changing in the industry. “Things started slowly in 2013 but really systems. More than 78 percent of CEOs re- picked up steam. It was a great market,” said The price tag, which was 4.6 times sponded that technological advance- Augier. He said that sellers who couldn’t get the revenue of Homelink under JCI, ment is a trend that’s going to trans- deals done in time in 2012 to avoid increases also exceeded most analyst projec- form the business over the next five in capital sales taxes found a silver lining in tions — underscoring the importance years, according to the PWC survey. 2013 by higher deal values that more than of the technology to Gentex. But, unlike some of the Detroit- offset their higher taxes. The supplier also took on $300 mil- area deals, geographic expansion re- “I’m in my 27th year of doing this, and I can’t lion of debt for the deal, which marks mains a focus area nationally. Ac- think of a more attractive time to sell a the first time it’s taken on debt in cording to the PWC study, emerging business. If you have an attractive company several years. markets like China and Central and and bring it to market, you’ll get a lot of “More and more companies don’t Eastern Europe remain hot spots for interest.” want to just play or dabble in a mar- auto acquisitions. That’s according ket segment,” Kothari said. “Capaci- to 37 percent and 24 percent of re- Matt Elliott, president of ty is reduced, volumes are through spondents, respectively. Bank of America’s the roof and they are consolidating Only 11 percent of global automo- operations in Michigan, said their efforts in these areas they know tive CEOs in the study are planning a low interest rates in 2013 they can grow.” domestic acquisition by 2016. caused many companies to Kothari said automotive deal mul- access potential deals. tiples have grown to an average of 7- “We saw a lot of companies Technology a deal driver 7.5 times earnings before interest, spend a lot of time poring Conveyor and baggage systems taxes, depreciation and amortization. over lots of targets,” Elliott maker Daifuku Webb Holding Co. in That’s up from five times EBITDA in said. “They built up an Farmington Hills executed a $50 mil- 2009, but down from the average of acquisition pipeline, and the lion deal to acquire Elk Grove, Ill.- eight times EBITDA in 2007. lending environment is very favorable right based Wynright Corp. for its voice- and “The strong economy, strong oper- now.” light-directed suite of conveyor tech- ating performance and relatively Bank of America has seen a mix of deals nology. cheap debt drove valuations in 2013, involving technology targets and cross-border The deal is part of Daifuku’s which will continue,” Kothari said. activity, Elliott said. growth strategy, Value Innovation “There are always greater economic 2017, to increase sales and margins, factors at play, but business is being part of which is accomplished driven by a company’s ability to through new technology offerings. grow.”

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By Mark Sanchez percentage of committed purchase price, though “the negotiations are just as hot either in cash or locked in. So they’re not and heavy on those fronts,” Koh said. he cash-rich buyers chasing high- as willing to accept the contingency pay- During 2013, financial contingencies quality deals have created a seller’s outs that are somewhat buyer-friendly.” and escrows also were subject to in- Tmarket in Michigan’s M&A world, M&A attorney Jin-Kyu Koh, with De- creased negotiations, according to the altering some deal terms in favor of the troit-based Dykema Gos- Dykema survey of corporate executives owners seeking a buyer for their business. sett PLLC, said he saw and M&A advisers. Sellers’ expectations of buyers have fewer earnout provi- Prior to 2013, changes in deal terms been raised, particularly if their compa- sions used in middle- were gradual, and terms tended to favor ny is healthy and has a good recent track market transactions he buyers, said Matt Miller, managing part- record. handled for privately ner of M&A firm BlueWater Partners in “Sellers are getting very aggressive in held companies in the Grand Rapids. terms of what they’re expecting in terms past year. More recent- Miller cites data from GF Data Re- of limited escrows and limited indemnifi- ly, the number has sources LLC, a firm based in West Con- cation obligations,” said Michael DuBay, dropped to zero, he shohocken, Pa., that analyzes middle- private equity practice group leader with said. In 2011 and 2012, market private equity investments. The Koh Honigman Miller Schwartz and Cohn LLP in “many, if not most” of data shows indemnification periods from Detroit. the deals with which he was involved had 2008 to 2012 actually increased to 20.9 One common tool used a few years ago an earnout provision. months from 18.5 months. Escrow and by buyers now shows up less frequently Their decreased use stems from the holdback periods increased to 16.9 from in transactions: earnouts. leverage business owners now have in a 16.0 months during the same five-year pe- An earnout is a provision that may be seller’s market, Koh said. riod for private equity deals, according used when sellers and buyers cannot agree “The companies that are privately to GF Data Resources. on the valuation of a business. The seller owned, they’re getting the valuation they As sellers have become more aggres- will agree to have a part of the purchase need and that they want,” Koh said. “If sive amid increased market demand, price come from future sales or profits of they don’t get the valuation, they just say Miller sees post-recession buyers today the business, if a set target is met. ‘no.’ ” that are seeking more protections after The deals that Grand Rapids-based M&A Koh’s experience represents a small the recession. Due diligence has been go- adviser John Kerschen worked on two sample of how deal terms are changing in ing longer and deeper in a lot of the deals years ago often used the post-recession economy. Data suggest Miller’s firm works on, he said. earnouts to cover the the use of earnout provisions, although “It has to do with the perception of gap between how the less frequent, haven’t gone away across greater risk today than years ago,” two sides see a compa- the board. Miller said. “It runs counter to the logic ny’s valuation. That gap In the 2013 Dykema M&A survey, fewer that today there are more buyers than can range between 10 respondents reported increased use of sellers, but I think with the conservative percent and 30 percent. earnout provisions across all types and posture of banks and buyers’ investors, “In today’s world, sizes of deals in the past 12 months. The (buyers) have been disciplined and pa- it’s most often zero, or survey showed 30 percent of respondents tient and have insisted on additional pro- maybe 10 to 20 percent reported earnouts being used, while 62 tection. or less,” said Kerschen, percent said it was unchanged. That com- “It’s the shock of the recession and af- Kerschen managing director of pares to 36 percent who reported in- termath and the slow expansion after the the The Charter Group, which generally creased use of earnouts in 2012 and 54 per- recession. Our memories are vivid at this handles deals up to $250 million in value. cent who said their use was unchanged. point.” “The negotiating leverage or balance The 2013 Deal Points Study by the Ameri- While the proverbial pendulum has of power is firmly in the seller’s camp can Bar Association found that the use of swung to favor sellers of late, Charter right now,” Kerschen said. “Because of earnouts had returned to pre-recession lev- Group’s Kerschen sees it eventually the negotiating environment that we’re els. They were used in 25 percent of the swinging back as more companies come in, sellers have relatively more deals studied in 2013, down from 38 percent on the market. The baby-boomer genera- leverage, and they’re de- two years earlier and comparable to the 27 tion is now just beginning to exit busi- manding a greater percent in 2007, just before the recession nesses and sell, which in time will bring began. The study analyzes deals for pri- greater equilibrium to the M&A market, vately owned companies acquired by pub- Kerschen said. lic companies. “That will start to bring valuations The transition over the past year toward back down to more normal, historical lev- a seller’s M&A market has pushed up ask- els,” he said. “We’re in a seller’s swing ing prices and multiples for some deals. right now, and then as more and more Beyond earnouts, M&A professionals sellers come to market over time, that say deal terms for issues such as indem- will absorb some of this capital, and the nification, survival periods, escrow buyers will stiffen a little bit. amounts and holdback periods in the last “You just don’t know if that is this year or so have not changed a lot, al- year, next year, or several years out.”

SPRING 2014 Page 9 FALL 2006 CDB Living In The D_New CD Magazine sized 2/14/2014 10:49 AM Page 1

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CRAIN'S LISTMICHIGAN: MERGERS DEAL & ACQUISITIONSLIST: MERGERS & ACQUISITIONS

Value of Date transaction Rank Acquirer name Target Acquirer advisers Target advisers effective Description ($000,000) Perrigo Co., Allegan Elan Corp. PLC, Dublin, Barclays Capital; Sullivan A&L Goodbody; December Perrigo and Elan combined under a new $8,600.0 Ireland & Cromwell; Ernst & Citigroup; Davy; corporate entity based in Dublin, Ireland. The Young; Dillon Eustace; Morgan Stanley; new company is Perrigo Co. plc and is traded Fried, Frank, Harris, Ondra Partners on the New York Stock Exchange and the Tel 1. Shriver & Jacobson; Aviv Stock Exchange. PricewaterhouseCoopers; Drinker Biddle, FTI Consulting; Miller Canfield Fiat SpA, , Chrysler Group LLC, Deutsche Bank AG; Evercore Partners January, Fiat completes full acquisition of remaining $4,350.0 Auburn Hills, shares Lazard Ltd; Sullivan & Inc.; Skadden Arps 2014 Chrysler shares from UAW's VEBA Trust. 2. owned by UAW Retiree Cromwell Slate Meagher & Medical Benefits Trust Flom LLP General Motors Financial, Latin American and Barclays Capital; Merrill Citigroup; Evercore October Deal includes auto fiancing operations in a $4,250.0 Detroit European operations of Lynch; Houthoff Buruma; Partners; Lazard Ltd.; wide range of countries and a 40 percent Ally Financial, Detroit Weil, Gotshal & Manges Garrigues Portugal; stake in a joint venture in China. 3. Pinheiro Neto Advogados; Sullivan & Cromwell General Motors Co., International auto Merril Lynch; Barclays Citigroup; Evercore Pending Pending regulatory approval $4,200.0 Detroit finance operations of Capital Partners; G5 4. Ally Financial, Detroit Evercore; Lazard Ltd; Sullivan & Cromwell Royal Bank of Canada Ally Credit Canada Ltd. RBC Capital Markets; Citigroup; Evercore January, Units were Ally's Canadian auto finance $3,700.0 and ResMor Trust Co. Osler, Hoskin & Partners; Lazard Ltd.; 2013 business and Canadian deposit business. 5. units of Ally Financial Harcourt Sullivan & Inc., Detroit Cromwell; Torys Harland Clarke Holdings Valassis Kirkland & Ellis LLP; J.P. Morgan February, Acquisition price was $34.04 a share. $1,840.0 6. Corp., San Antonio Communications Inc., McDermott Will & 2014 Livonia Emery LLP Stryker Corp., Kalamazoo Mako Surgical Corp., Skadden Arps Wachtell Lipton; JP December Mako becomes a wholly owned subsidiary of $1,680.0 Fort Lauderdale Morgan Stryker. Mako’s common stock, par value 7. $0.001, was converted into the right to receive $30 in cash. IHS Inc., Englewood, Colo. R.L. Polk & Co., Blank Rome LLP; Davis Evercore Partners; June Included Carfax, a Web-based service that $1,400.0 8. Southfield Pol; M. Klein and Co. Honigman Miller supplies vehicle history reports to individuals and businesses on used cars and light trucks. SKF AB, Gothenburg, Kaydon Corp., Ann Mannheimer Swart; Reed Greenberg Traurig; October Kaydon Corp. makes friction control, velocity $1,241.0 Sweden Arbor Smith LLP; Davis Polk; Barclays Capital; control and specialty products. Sixty-two Stout Risius Ross Paul Hastings percent of sales are generated in North America, 24 percent in Europe, 12 percent in 9. Asia Pacific and 2 percent in the rest of the world. Had 2012 sales of $475 million, with operating profit of about 16 percent. Acquirer paid $35.50 a share. FirstMerit Corp., Akron Citizens Republic Jones Day; RBC Capital J.P. Morgan April Deal forms sixth largest bank in Midwest. $1,024.0 10. Bancorp Inc., Flint Markets Securities; Dykema Gossett Private placement Federal government's December Sale was the last of the U.S. government's $900.0 11. 8.5 percent stake in stake in GM. General Motors Co. Unidentified buyer General Motors Co.'s Citigroup; Goldman December GM sold off the last of its 8.5 percent stake, $900.0 11. remaining stake in Ally Sachs recording a gain of $500 million in fourth Financial Inc., Detroit quarter. CIT Group Inc. $1.26 billion in Sandler O'Neill & January, Portfolio included equipment leases, asset- $779.0 commerical loan Partners; Bracewell 2013 based loans and commercial real estate loans 13. commitments in New & Giuliani; Nutter in the Northeast, with $785 million England by Flagstar McClennen & Fish outstanding. Bank Stryker Corp., Trauson Holdings Co, Barclays Capital; UBS AG March Paid $7.50 a share. As of March 1, Stryker $764.0 Kalamazmoo Ltd., Changzhou, China Conyers Dill; Sullivan had acquired 718,241,278 shares 14. Cromwell representing approximately 92.76 percent of the issued share capital of Trauson. Gentex Corp, Holland Homelink operations of Ropes & Gray Wachtell Lipton; J.P. September Johnson Controls had supplied HomeLink, $700.0 Johnson Controls Inc., Morgan which provides wireless vehicle/home 15. Milwaukee communication, to Gentex for its rearview mirror products. Deal was in cash. Spartan Stores Inc., Grand Nash Finch Co., Warner Norcross & Judd Morgan, Lewis & November Each outstanding share of the common stock $688.0 Rapids Minneapolis LLP; Moelis & Co. LLC Bockius LLP; J.P. of Nash Finch was converted into the right to Morgan receive 1.20 shares of Spartan Stores' 16. common stock. Spartan issued approximately 16.5 million shares of its common stock to Nash Finch shareholders. Athens Acquisition LLC, Greektown Casino, Honigman Miller December Group led by Dan Gilbert acquired the $620.0 Detroit, an affiliate of Detroit casino-hotel through a series of deals Rock Gaming LLC initiated in June 2012 and completed in December 2013. Gilbert envisions the casino 17. as part of his larger plan to revitalize downtown Detroit with new retail and entertainment. Value includes $400 million in assumed debt. Continued on Page 13 SPRING 2014 Page 11 FALL 2006 CDB Living In The D_New CD Magazine sized 2/14/2014 9:06 AM Page 1

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CRAIN'S LIST:MICHIGANMERGERS DEAL & ACQUISITIONSLIST: MERGERS & ACQUISITIONS

Continued from Page 11 Value of Date transaction Rank Acquirer name Target Acquirer advisers Target advisers effective Description ($000,000) Rizvi Traverse Sesac Inc., Nashville, Akin Gump Straus June Bought 75 percent stake in firm that $600.0 18. Management LLC, Tenn. controls licensing rights for Bob Dylan, Neil Birmingham Diamond and many others. Whirlpool Corp., Benton Hefei Rongshida Sanyo Clearly Gottlieb Goldman Sachs Pending Through a subsidiary, Whirlpool agreed to $552.0 Harbor Electric Co Ltd., purchase a 51 percent stake in the Chinese Anhui, China appliance maker. The agreement calls for Whirlpool to buy shares owned by Sanyo 19. Electric Co. and new shares via a private placement. The agreement calls for the transaction to close by December 2014 or Whirlpool will pay a $20 million breakup fee. BorgWarner Inc., Auburn Gustav Wahler GmbH, Hengeler Mueller Lazard & Co. GmbH Expected Target specializes in exhaust gas $350.0 Hills Germany to close in recirculation products. Value is estimated 20. first by Baird Equity Research based on one quarter year's revenue. Lundin Mining Corp., Rio Tinto Eagle Mine, Cassels Brock; Paul Fried Frank July Toronto-based company acquired Eagle $315.0 Toronto Ishpeming Weiss nickel and copper mine from UK-based Rio 21. Tinto for $250 million cash plus project expenditures of $65 million. Perrigo Co., Allegan Rosemont CMSA Cameron PricewaterhouseCoopers February Perrigo acquired 100 percent of shares of $283.0 Pharmaceuticals Ltd., McKenna; privately held Rosemont Pharmaceuticals 22. Leeds, UK PricewaterhouseCoopers Ltd. from private equity firm CBPE Capital LLP. Golden Gate Capital Safety Technology Harris Williams; Foley & June Sold by Wynnchurch Capital Partners LP, $250.0 23. Corp., Holdings Inc., Lardner Rosemont, Ill. Plymouth Dow Corning Corp., Hemlock November Dow Corning purchased Mitsubishi's 12.25 $240.0 Midland Semiconductor Corp., percent stake in both entities to boost its Hemlock ownership of the joint ventures to 100 Semiconductor LLC percent of Hemlock Semiconductor LLC 24. operations of and 80.5 percent of Hemlock Mitsubishi Materials Semiconductor Corp. Shin-Etsu Handotai Corp., Chiyoda-Ku, Co. Ltd. remains the minority shareholder of Japan Hemlock Semiconductor Corp. Penske Automotive Western Star Trucks DLA Piper LLP Deutsche Bank; Ashurst August Bought from Transpacific Industries Group $202.7 25. Group Inc., Bloomfield Australia Pty Ltd., LLP Ltd Hills Wacol, Australia Encore Capital Group Asset Acceptance Latham & Watkins William Blair; Kirkland & June Paid $6.50 a share. $200.0 26. Inc., San Diego Capital Corp., Warren Ellis Answers Corp., St. Louis, ForeSee Results Inc., Internal Internal December ForeSee had 2013 revenue of about $200.0 Mo. Ann Arbor $52 million and employed 335 worldwide, 26. with about 250 of those in Ann Arbor, at year-end 2013. Acquisition helps Answers Corp. solidify a potential IPO. Centene Corp., St. Louis U.S. Medical Kirkland & Ellis Jaffe Raitt Heuer & Weiss Expected Sold 68 percent interest in the company. $200.0 Management, Troy and B.C. Ziegler and Co. to close in USMM operates 39 offices in 11 states and 26. first had 2013 revenue of about $195 million. quarter Purchase is expected to be funded one-third cash and two-thirds Centene stock. Talmer Bancorp Inc., First Place Bank, Keefe, Bruyette & Woods January, Assets bought out of bankruptcy. $200.0 26. Troy Warren 2013 WW Grainger Inc., Lake E&R Industrial Sales August E&R had 2012 revenue of $180 million. $175.0 30. Forest, Ill. Inc., Sterling Heights Deal value is estimated. Mercantile Bank Corp., Firstbank Corp, Alma Warner Norcross & Judd Varnum LLP; Sandler Pending Mercantile Bank will issue 8.5 million $160.2 Grand Rapids LLP O'Neill & Partners due to shares to Firstbank shareholders. The regulatory combined companies will have 53 offices 31. approvals; throughout Michigan's lower peninsula and expected assets of approximately $2.8 billion. to close in Q1 2014 Perrigo Co., Allegan Velcera Inc., Yardley, Morgan, Lewis & Willkie Farr, J.P. Morgan April Velcera makes generic versions of name- $160.0 32. Pa. Bockius brand veterinary products. United Road Services Waggoners Trucking Charlesbank Capital Internal December Combined entity doubles United Road's $160.0 32. Inc., Romulus Inc., Billings, Mo. Partners capacity. Deal value is estimated. Herman Miller Inc., Maharam Fabric Varnum LLP White & Case LLP April Maharam makes textiles, window $156.0 Zeeland Corp., New York treatments and wall coverings and reported revenue of about $105 million in calendar 34. 2012. As a result of the transaction, Herman Miller estimates it will receive future tax benefits with a present value of approximately $20 million. Aquilex Holdings LLC Inland Industrial Kirkland & Ellis LLP; Jaffe Raitt Heuer & December Strength Capital of Birmingham sold Detroit $150.0+ Services Group LLC, Pricewaterhouse Weiss; industrial cleaning business. Deal was over 35. Detroit Coopers PricewaterhouseCoopers; $150 million, but the exact transaction Houlihan Lokey Capital value was not available. Customers Bancorp Inc., New England Sandler O'Neill & July Operation was launched under previous $148.9 Wyomissing, Pa. commerical lending Partners; Bracewell & management in 2011. Sold were loans of 36. business of Troy-based Giuliani; Nutter $150.9 million and commitments of $187.6 Flagstar Bancorp McClennen & Fish million. Continued on Page 15 SPRING 2014 Page 13 FALL 2006 CDB Living In The D_New CD Magazine sized 3/4/2014 8:46 AM Page 1

Annual Mackinac Edition ISSUE DATE: June 2 | AD CLOSE: May 15

Reach our most in uential audience Á of the year!

The Detroit Regional Chamber Mackinac Policy Conference, May 27-30.

A special print edition will be distributed to conference attendees. Featuring: American Dreamers: Immigration Success Stories Read about the accomplishments of local immigrants who achieved business success, and what it took to get there. Business Education Directory: New Business Education Programs in Southeast Michigan LIST: Michigan Graduate Business Crain’s Degree Programs Will Be LIST: Largest Private Companies in

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CRAIN'S LISTMICHIGAN: MERGERS DEAL & ACQUISITIONSLIST: MERGERS & ACQUISITIONS

Continued from Page 13 Value of Date transaction Rank Acquirer name Target Acquirer advisers Target advisers effective Description ($000,000) Littelfuse Inc., Chicago Hamlin Inc., Lake Mills, McDermott Will & Dykema Gossett May Acquired from Key Safety Systems Inc., $145.0 37. Wisc. Emery LLP PLLC Sterling Heights. RTI Surgical Inc., Alachua, Pioneer Surgical Norton Rose Fulbright UBS AG, Varnum July Company was founded on the invention of $130.0 Fla. Technology Inc., LLP; Fulbright & Jaworski LLP the Songer Spinal Cable. Pioneer's current Marquette LLP products encompass the spine, cardiothoracic, orthopedics and biologics 38. markets worldwide with offices throughout the U.S. and in Europe and two U.S. manufacturing facilities. Acquisition included an affiliate, Rockets MI Corp. Universal Truckload Westport Axle Corp., Bodman PLC White & Case LLP December Bought from SM Brasil Participacoes SA. $123.0 39. Services Inc., Warren Louisville, Ky. Stryker Corp., Patient Safety Covington & Burling LLP Latham & Watkins Pending Stryker expands medical/surgical and $120.0 Kalamazmoo Technology Inc., Irvine, LLP neurotechnology business segment by 40. Calif. acquiring niche maker of bar-coded surgical sponges and towels. Perrigo Co., Allegan Opthalmic product Warner Norcross & Judd, June Transaction included an upfront cash $110.4 portfolio of Fera LLP payment of approximately $88.4 million 41. Pharmaceuticals LLC, along with potential contingent payments Locust Valley, NY totaling approximately $22 million relating to additional product rights. Gain Capital Holdings Global Futures & Forex Davis Polk & Wardwell Sidley Austin LLP September Global Forex founder and sole owner Gary $108.3 Inc., Bedford, NY Ltd., Grand Rapids LLP Tillkin received $40 million cash, a 42. $33 million note and $35 million in Gain's publicly traded stock in the transaction. Rockbridge Growth Equity Rapid Financial Honigman Miller September Bought company is a small-business lender. $100.0+ 43. LLC, Livonia Services LLC, Bethesda, Deal value is more than $100 million, but Md. exact amount is not available. Nuance Communications Tweddle Connect Wilson Sonsini Goodrich Kerr, Russell and May Tweddle Connect makes an in-car $82.8 Inc., Burlington, Mass. Business of Tweddle & Rosati Weber PLC infotainment system that pulls in content 44. Group Inc., Clinton from sites like Pandora, Bing, iHeart Radio Township and OpenTable. Amtrust Financial Services Car Care Plan Holdings Norton Rose Fulbright Mayer Brown LLP February Provider of vehicle and extended $70.0 Inc., New York Ltd., Thornbury, LLP warranties. 45. England, unit of Ally Financial, Detroit Carter Fuel Systems LLC, Federal Mogul's fuel Benesch Angle Advisors; September Sold by Soutfield based Federal-Mogul. Value $70.0 45. Logansport, Ind. systems business Bodman is estimated. Visteon Corp., Van Buren Yanfeng Visteon Goldman Sachs; August Visteon added to existing stake, making it the $68.0 Township Automotive Electronics Rothschild; Skadden majority stakeholder at 51 percent. 47. Co Ltd., Shanghai, Arps China Forward Air Corp., Total Quality Inc., DLA Piper LLP Greenberg Traurig March In addition to the $66 million purchase price, $66.0 48. Greenville, Tenn. Grand Haven LLP closely held Total Quality may earn up to $5 million in earnout based on performance. Ares Commercial Real EF&A Funding LLC, Skadden Arps DLA Piper LLP September Sold by the Alliant Co., Woodland Hills, $62.7 49. Estate Corp., Chicago Southfield Calif. Charter Oak Equity, High Crown Group Inc., Thompson Hine Quarton Partners May Crown provides coating services to the $60.0 Road Capital Partners LLC Warren transportation, agriculture and general 50. (Fund: High Road Capital industrial end markets. Partners II LP) Chongqing Helicopter Enstrom Helicopter Simpson Thacher Dec. 27, Chongqing acquired the U.P.-based civilian $60.0 50. Investment Co. Ltd, China Corp., Menominee 2012 helicopter company from an unamed investor who has owned the company since 2000. Shiloh Industries Inc., Contech Castings LLC, Wegman, Hessler and Angle Advisors; August Acquired from Southfield-based Revstone $54.4 Valley City, Ohio Southfield Vandenburg Huron Consulting; Transportation LLC. Includes plants in Alma; McDonald Hopkins Clarksville, Tenn.; and Auburn and Pierceton, 52. Ind., as well as new contracts with Ford Motor Co., General Motors Co., Chrysler Group LLC and Nexteer Automotive Inc. Daifuku Webb Holding Wynright Corp., Elk PricewaterhouseCoopers; Meltzer Purtill & October Wynright Corp. has about 500 employees $50.0+ 53. Co., Farmington Hills Grove, Ill. Baker McKenzie, Steele LLC, Chicago and revenue of more than $200 million. Chicago Long Point Capital, Royal The Saxton Group, Ropes & Gray; Crowe January, Multi-unit franchisee of fast-casual $50.0+ 53. Oak Dallas Horwath 2013 restaurants. Value is more than $50 million, but an exact figure is not available. Genpact Ltd, Hamilton, Jawood Business Harris Williams; AZB February Acquisition strengthens GenPact's solutions $47.2 Bermuda Process Solutions LLC, & Partners and services offerings in the health care payer 55. Bingham Farms; Felix market. Software Solutions Pvt Ltd., India Fiat SpA, Turin, Italy General Motors Co.'s October Fiat Powertrain Technologies SpA acquired $47.0 50 percent stake in VM the remaining 50 percent stake in VM Motori 56. Motori SpA, Cento, SpA from GM Powertrain Europe. Italy Thierry Morin Consulting Federal Mogul PricewaterhouseCoopers De Pardieu Brocas March Sold by Federal-Mogul Corp., Southfield. $42.0 SASU, Neuilly-sur-Seine, Sintertech SAS, Saint Corporate Finance Maffei Value is estimated. 57. France Jean De La Ruelle, France; Landwell France Continued on Page 17 SPRING 2014 Page 15 FALL 2006 CDB Living In The D_New CD Magazine sized 2/27/2014 10:01 AM Page 1

CELEBRATING WEST MICHIGAN’S TOP DEALS AND DEALMAKERS

COCKTAIL RECEPTION: OCTOBER 8, 2014

MiBiz and the Association for Corporate Growth’s Western Michigan chapter are teaming up to spotlight M&A best practices and excellence related to mergers, acquisitions and dealmaking throughout the region. DEALS & DEALMAKERS Nominations for the second-annual M&A Deals & Dealmakers Awards open June 1, 2014, and will be accepted from companies, advisers and professional AWARDS service organizations in the following categories: Q Best Corporate Deal of the Year: $100M+ Q Best Company Deal of the Year: Under $100M Best Small Company Deal of the Year: Under $10M PRESENTED IN COOPERATION WITH Q Q Dealmaker of the Year: Buyer-Seller Q Dealmaker of the Year: Adviser

GOLD SPONSO R Winners will be featured at the event to be held on October 8, 2014 in Grand Rapids.

NOMINATIONS WILL OPEN JUNE 1, 2014

mibiz.com/events 20140310-SUPP--0017-NAT-CCI-CD_-- 3/3/2014 3:59 PM Page 1

CRAIN'S LISTMICHIGAN: MERGERS DEAL & ACQUISITIONSLIST: MERGERS & ACQUISITIONS

Continued from Page 15 Value of Date transaction Rank Acquirer name Target Acquirer advisers Target advisers effective Description ($000,000) Zeigler Automotive Group, BMW of Orland Park, Varnum LLP, July Kalamazoo mega-dealer expands Chicago $40.0 58. Kalamazoo Orland Park, Ill. Bodman LLP presence with acquisition of BMW dealership. Dayco Products LLC, Tulsa, Metavation LLC, Angle Advisors; September Bought from Southfield-based Revstone. $34.0 59. Okla. Southfield Huron Consulting; Crain's estimate. McDonald Hopkins Trimas Corp., Bloomfield Mac Fasteners Inc., Internal; Honigman October Acquired company makes stainless steel $34.0 Hills Ottawa, Kan. Miller aerospace fasteners used by OEMs, aftermarket repair companies and commercial and military 59. aircraft producers. Had about $17.5 million in revenue for 12 months ended Sept. 13, 2013. Deal value could rise to $40 million if specified future operating results are met. Long Point Capital, Royal St. George Warehouse, Ropes & Gray January, Provider of container freight station services. $30.0+ 61. Oak South Kearny, N.J. 2013 Value is more than $30 million, but an exact amount is not available. Gentherm Inc., Northville WET Automotive Roth Capital Partners Baker Tilly Roelfs AG February Then-Amerigon Europe GmbH acquired $29.6 Systems AG, LLC; Craig Hallum additional 8.23 percent stake in WET Odelzhausen, Germany Capital Group LLC; Automotive Systems AG from Axxion SA and 62. Lincoln International various minority shareholders. Gentherm's and Bank of America Amerigon Europe unit now holds a 98.8 percent stake in WET Automotive. Douglas Dynamics Inc., TrynEx Inc., Madison Foley & Lardner April Acquired company makes truck-mounted salt $26.0 Milwaukee Heights and sand spreader equipment under the brand 63. name SnowEx. Also makes turf application and industrial attachment products under the brand names TurfEx and SweepEx. Westport Innovations Inc., ServoTech Engineering Willkie Farr May Acquired from Seal Beach, Calif.-based Clean $25.0 Vancouver, B.C. Inc., Belleville, BAF Energy Fuels Corp. 64. Technologies Inc., Dallas Boyd Group Income Fund, Hansen Collision and September Canadian firm continues roll up of body shop $23.2 Winnipeg, Canada Glass operations of HC companies with purchase of 25 Hansen 65. Capital Group Inc., Collision and Glass locations in West Grand Rapids Michigan and northeastern Indiana. Endress+Hauser Inc., Kaiser Optical Systems In-house advisors In-house April Sold by Rockwell Collins Inc., Cedar Rapids, $23.0 66. Greenwood, Ind. Inc., Ann Arbor Iowa Boersen Farms Inc., Stamp Farms LLC and Varnum LLP March Stamp filed for Chapter 11 bankruptcy in $22.8 Zeeland related assets, Decatur, November 2011. Boersen's $22.8 million Mich. stalking horse bid on the 25,000-acre farm and 67. a reported $17 million in equipment and other assets was accepted by the U.S. bankruptcy court. Glencoe Capital, Dialogue Marketing, Honigman Miller December Michigan Opportunity Fund provided growth $20.0+ Birmingham Troy equity in Troy marketing firm. Deal was more 68. than $20 million, but exact amount was not available. Long Point Capital, Royal Precision Products Ropes & Gray; April Manufacturer of spiral wound tubes. Value is $20.0+ 68. Oak Group, College Park, Crowe Horwath more than $20 million, but an exact figure is Md. not available. Moosejaw Mountaineering Equity stake in company Honigman Miller; December Glencoe sold equity stake it had bought from $20.0+ and Backcountry Travel owned by Glencoe Partnership Capital the $150 million Michigan Opportunities Fund 68. Inc. Capital Growth it manages for the state back to the company. Value is more than $20 million, but exact amount is not available. Dongfeng Electronic Dongfeng Visteon Rothschild June Sold by Visteon Corp., Van Buren Township; $20.0 Technology Co. Automotive Trim Yanfeng Visteon Automotive Trim Systems Co. Ltd,Yanfeng Visteon Systems Co. Ltd., Ltd. and Dongfeng Electronics Technology Co. 71. Automotive Trim Systems Wuhan, China Ltd. agreed to acquire remaining 20 percent Co. Ltd. stake in Dongfeng Visteon Automotive Trim Systems Co. Ltd. Nadex Co Ltd., Japan Weltronic/Technitron Nikko; Lane Powell Internal November Nadex has owned 47 percent of the local $20.0 71. Inc., Farmington Hills PC company since 1989; new deal is for the remaining stake. Park Ohio Corp., Cleveland Bates LLC, Lobelville, Jones Day Angle Advisors; Kerr May Bates makes automotive hoses and industrial $20.0 71. Tenn. Russell gaskets. Sold by Livonia-based NYX. Value is estimated. Blackford Capital LLC, Mopec Inc., Oak Park Miller Canfield; Rehmann, Duffy & August Detroit-based manufacturer of pathology and <$20.0 Grand Rapids Barnes & Thornburg; Robertson PC; PM mortuary equipment. Deal was less than Crowe Horwath; Environmental $20 million. Comerica Bank; 74. Northcreek Mezzanine Fund; and ASTI Environmental Trimas Corp., Bloomfield Martinic Engineering Internal; Honigman January, Martinic manufactures highly-engineered, $19.0 Hills Inc., Stanton, Calif. Miller 2013 precision machined complex parts for commercial and military aerospace 75. applications, as well as electrical, hydraulic and pneumatic systems. Martinic Engineering generated approximately $13 million in revenue in 2012. Continued on Page 18 SPRING 2014 Page 17 FALL 2006 20140310-SUPP--0018-NAT-CCI-CD_-- 3/3/2014 3:59 PM Page 1

CRAIN'S LIST:MICHIGANMERGERS DEAL & ACQUISITIONSLIST: MERGERS & ACQUISITIONS

Continued from Page 17 Value of Date transaction Rank Acquirer name Target Acquirer advisers Target advisers effective Description ($000,000) Cooper-Standard Holding Jyco Sealing Miller Canfield PLC July The acquired business is operated from Jyco's $17.5 76. Inc., Novi Technologies Inc., Ann manufacturing locations in Canada, Mexico Arbor and China. HSP-EPI Acquisition LLC Entertainment Seneca Partners April Lowell Potiker bought Entertainment $17.5 Publications LLC, Troy Publications' assets out of Chapter 7 76. bankruptcy. Potiker is the son of Entertainment founders Hugh and Sheila Potiker. Barnes International Inc. Durr Ecoclean's Levenfeld Pearlstein Angle Advisors; Jaffe December Sold by Wixom-based Durr Ecoclean. Value is $15.0 78. industrial filtration Raitt estimated. business Becker Ventures LLC, AltheRx Inc., Chadds November AltheRx is a cllinical development company $15.0 Grosse Pointe Ford, Pa. focused on advancing compounds with promise in large unmet markets. Its lead 78. product, solabegron, is being investigated for overactive bladder and irritable bowel syndrome. JD Norman Industries Inc., Connecting rod business Winston & Strawn Angle Advisors; March Sold by Federal-Mogul Corp., Southfield. $15.0 78. Addison, Ill. Stikeman Elliott Value is estimated. Prestige Automotive Group, Rinke Cadillac, Warren Clark Hill PLC Internal July Bought from Penske Automotive. $15.0 78. St. Clair Shores Revolution Lighting Relume Technologies Finn Dixon & August Relume, maker of LED lighting for large $15.0 Technologies Inc., Inc., Oxford Herling LLP commercial and government projects, will 78. Charlotte, NC continue to operate under that name. Deal marked successful exit for Beringea LLC. Tramec LLC Sloan Transportation Winston & Strawn Angle Advisors; May Sold by Southfield-based Qualitor. Value is $15.0 78. Products Inc. Dykema Gossett estimated. Trimas Corp., Bloomfield C.P. Witter Ltd., United Internal April Company added to TriMas' Cequent Asia $14.0 84. Hills Kingdom Pacific segment, now Cequent APEA (Asia Pacific Europe Africa). Thornapple Capital Inc., Agility Health Inc., Irwin Lowy LLP Wildeboer Dellelce October Grand Rapids-based Agility Health went $13.3 Toronto Grand Rapids (Toronto) LLP (Toronto) public via reverse merger with Thornapple 85. Capital, a capital pool company that is traded on the Toronto's TSX Venture Exchange. Atlas Oil Holding Co., Hadi Group Distributors Internal Internal June Purchase made through bankruptcy includes $13.0 Taylor Inc., Dearborn the purchase of 20 retail gas station sites in 86. metro Detroit and up to 50 retail fuel supply contracts. Included book of business with Marathon. SRS International Holdings Empire Casting Co., Amherst Capital December Private equity firm purchased assets of Ohio- $12.5 87. Inc., Ludington Macedonia, Ohio Partners based auto supplier in Section 363 bankruptcy transaction. JD Norman Industries Inc., Camshaft business of Angle Advisors; March Value is estimated. $11.0 88. Addison, Ill. Federal-Mogul Corp., Lupton Fawcett Lee & Southfield Priestly Perseus LLC (Fund: Perseus NanoBio Corp., Ann June NanoBio makes emulsions that kill viral and $11.0 Partners VII LP),Venture Arbor fungal diseases. Equity was sold to raise money 88. Investors LLC (Fund: for product development Venture Investors) Rizzo Environmental V&M Corp., dba Royal November Gives Rizzo entry into the recycling business. $11.0 88. Services Inc., Sterling Oak Recycling, Royal Value estimated at half Royal Oak Recycling's Heights Oak $22 million in sales. Goldman Sachs Group Inc., ProQuest LLC, Ann Kirkland & Ellis; November Acquired minority interest in ProQuest in $10.0+ 91. New York Arbor Evercore Partners exchange for investment. Value is more than $10 million. Huron Capital Partners, My Family Dental, Honigman Miller; Greenberg Traurig July Dental service organization. Deal is more than $10.0+ 91. Detroit Phoenix, Ariz. Alvarez & Marsal $10 million, but an exact figure is not available. Huron Capital Partners, KLR Dental, Honigman Miller; Venable LLP July Dental service organization. Deal is more than $10.0+ 91. Detroit Charlottesville, Va. Alvarez & Marsal $10 million, but an exact figure is not available. Huron Capital Partners, Six Month Smiles, Honigman Miller; Benesch, Friedlander, February Orthodontic services. Deal is more than $10.0+ 91. Detroit Scottsville, N.Y. Alvarez & Marsal Coplan & Aronott LLP $10 million, but an exact figure is not available. Huron Capital Partners, Dynamic Dental Honigman Miller; Posternak Blankestein July Dental service organization. Deal is more than $10.0+ 91. Detroit Partners, Sarasota, FL Alvarez & Marsal $10 million, but an exact figure is not available. O2 Investment Partners Alpha Sintered Metals Baker Hostettler, Honigman Miller; December Pennsylvania metal works company also has $10.0+ 91. Stout Risius Partnership Capital joint venture in China. Value is more than Growth $10 million, but exact value was not available. O2 Investment Partners Mercury Manufacturing Honigman Miller Amherst Partners March Mercury makes components and assemblies $10.0+ LLC, Bloomfield Hills Co., Wyandotte for refrigeration, automototive industries. Deal 91. is more than $10 million, but exact value was not available.

Continued on Page 19

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Houghton power company worth CFO John Mooney. sold to London fund Old National acquires M&A Houghton-based Upper Peninsula Power Co. was sold by Chicago-based Integrys United Bancorp for $173M Energy Group Inc. to the London-based in- Old National Bancorp (Nasdaq: ONB), frastructure equity investment fund Bal- an Evansville, Ind.-based bank-holding four Beatty Infrastructure Partners LP. company, announced in January that it The purchase price is about deals had acquired Ann Arbor-based United $298.8 million. Bancorp Inc. (OTCQB: UBMI) in a Bracewell & Giuliani LLP and Foley & $173.1 million transaction that is expect- Lardner LLP were primary outside legal ed to close in the second quarter, pend- advisers to Integrys. Rothschild Inc. was ing approval by United shareholders Balfour’s financial adviser and Baker & and federal regulators. for McKenzie LLP its legal adviser. Shareholders of United Bancorp will The Bank of Nova Scotia and RBC Capi- receive 0.7 shares of Old National’s com- tal Markets are jointly providing struc- mon stock and $2.66 in cash for each turing and placement advice along with share of United common stock. financing for the transaction. The deal United Bancorp is the holding compa- 2014 was announced in January. ny for United Bank & Trust, which has 18 ust a few months into 2014, merg- branches in Washtenaw, Livingston, ers and acquisitions are already Haworth agrees to buy Lenawee and Monroe counties. It has Jbeing announced and closed. Some Italian furniture maker $919 million in assets, $806 million in de- of the deals announced so far this year posits, a loan portfolio of $643 million — to be on the list of 2014 deals — are Closely held furniture maker Haworth and a wealth management portfolio of below. Inc. announced plans in February to buy $869 million. publicly traded Italian furniture maker United Bank President Todd Clark will Poltrona Frau SpA. become Michigan regional president. Stryker rings in new year Holland-based Haworth said it would buy 59 percent of the furniture maker Visteon acquires JCI’s with a deal to buy Calif. firm for about 200 million euros ($270 mil- lion) from Moschini S.r.L and Charme In- electronics unit Kalamazoo-based Stryker Corp. (NYSE: vestments Ltd., a private investment firm SYK) rang in the new year with a run by Chairman Luca Cordero Van Buren Township-based Visteon $120 million deal to buy Patient Safety di Montezemolo. Corp. acquired the electronics unit of Technologies Inc., an Irvine, Calif.-based The transaction, expected to close in Milwaukee-based auto supplier Johnson maker of bar-coded sponges and towels. April, is subject to the approval of an- Controls Inc. in January. The deal was announced New Year’s Eve. titrust authorities. Haworth then will The Plymouth-based unit — which The transaction is expected to close in seek to acquire the remaining 41 percent makes instrument clusters, infotain- the first quarter of 2014, pending closing of the company through a tender offer to ment displays and body electronics — conditions and approval of the deal by Pa- shareholders. On completion of the ten- was purchased for $265 million. Visteon tient Safety Technologies stockholders. der offer, Haworth would take Poltrona estimates that its electronics operation The company makes surgical equip- Frau private and delist its shares. will generate annual sales of $3 billion. ment and software to help prevent doc- Depending on currency exchange Skadden Arps represented Visteon in tors from leaving sponges or towels in rates, the total value of the deal could be the deal, and Wachtell Lipton represented patient bodies after surgery. in $550 million to $600 million, said Ha- Johnson Controls.

CRAIN'S LIST:MICHIGANMERGERS DEAL & ACQUISITIONSLIST: MERGERS & ACQUISITIONS

Continued from Page 18 Value of Date transaction Rank Acquirer name Target Acquirer advisers Target advisers effective Description ($000,000) Huron Capital Partners, Henderson Coffee, Honigman Miller; McAfee & Taft November Premium coffee and related beverages. Add-on $10.0 98. Detroit Muskogee, Okla. Crowe Horwath for portfolio company Ronnoco Coffee. Neogen Corp., Lansing Syrvet Inc., Waukee, July Neogen paid $10 million cash with potential $10.0 98. Iowa contingent payment based on future revenues of the SyrVet veterinary instrument products. Unnamed Buyer Certain assets of Trimas Internal April Operating assets of Rieke Italia business sold. $10.0 98. Corp., Bloomfield Hills Zeigler Automotive Group, Don Davis Honda, Varnum LLP, March Kalamazoo mega-dealer moves outside of $10.0 98. Kalamazoo Amherst, N.Y. Bodman LLP Midwest region for the first time with acquisition of Buffalo area dealership.

Source: Company submissions, Crain's research and Bloomberg News. Many transactions had multiple sources of information. In some cases, more than one estimated value of a transaction exists. In those cases, Crain's has chosen the value it believes to be most accurate. The list does not include all 2013 transactions; only transactions valued at $10 million or more are included. LIST RESEARCHED BY CRAIN'S AND MIBIZ STAFF

SPRING 2014 Page 19 FALL 2006 CDB Living In The D_New CD Magazine sized 2/27/2014 11:15 AM Page 1

WHAT HAPPENS WHEN BIG IDEA meets backing

Connecting capital providers and entrepreneurs has long been the mission of the MEDC. That’s why we’re proud to support Accelerate Michigan and its vision to bring together the best and brightest to create business opportunities that are Pure Michigan.

1.888.565.0052 michiganbusiness.org/CD 20140310-SUPP--0021,0022,0023-NAT-CCI-CD_-- 3/3/2014 4:01 PM Page 1

Deal with it: 2013 was good for VC – but no 2012

’14 predictions: Rise in exits, health care IT By Gary Anglebrandt

arly last year, the president of the National Venture Capital Association Eremarked that Michigan was head- ed in the opposite direction of the rest of the country — and that was a good thing. Michigan’s deal volume and the dol- lars attached to those deals were on the rise, while the national numbers were headed downward. “As Michigan goes, so does the rest of the country not go,” said Mark Heesen, NVCA president at the time. The numbers for 2013 are in, and they show Michigan partly fell in line with the rest of the industry last year. Michigan deal volume was up 39 per- cent from 2012 to 2013, while dollars in- vested were down 57 percent, according to the MoneyTree report from the NVCA and PricewaterhouseCoopers. Nationally, numbers moved back to their 2011 levels, with volume up 3.5 per- cent and dollars invested up 7.7 percent. That contrasts with 2012, when Michi- gan’s VC activity spiked as investors from outside the state said they were drawn to Michigan’s lower costs and val- uations, state initiatives to support en- trepreneurs and investment, and an available talent pool of educated, experi- enced people, as well as entrepreneurs with a Midwestern work ethic. Michigan’s dollars invested nearly tripled to $239 million in 2012 from $83 million the previous year, while national dollars invested dropped 8 percent to $27.3 billion. Michigan’s strong 2012 had a lot to do with timing, industry insiders said. Funds had pent-up money that needed to be deployed — many of them fueled with state government funds intended to spur the economy. And the state’s econo- my, which was on weak footing well be- fore the real estate-driven meltdown, was coming back a beat earlier than other ROBERT CHASE Tony Grover’s RPM Ventures specializes in automotive information technology — one iteration of that being the “connected car.” “I do expect to see, this year and the next couple of years, SEE DEALS, PAGE 22 there’s going to be a lot of investment in this area.” SPRING 2014 Page 21 FALL 2006 20140310-SUPP--0021,0022,0023-NAT-CCI-CD_-- 3/3/2014 4:01 PM Page 2

DEALS, FROM PAGE 21 parts of the country. Solutions Realized “We saw a lot of activity in 2011 and 2012, and a lot of that was that Michigan was so Whether your business has plans to grow from within, make acquisitions, or far behind in terms of where the economy recapitalize, one thing is clear: It’s critical to have a knowledgeable banking was,” said Peter Roth, partner at Grand partner in your corner. That’s why businesses depend on FirstMerit Bank’s Rapids-based law firm Varnum LLP, whose expertise in Business Credit and Sponsor Finance to help turn their plans practice covers venture capital. “We had an uptick, and maybe it’s nor- into success. As a preferred capital provider for private equity groups, we’re malized now.” here to listen, to learn, and to understand your business and your goals. Let us show you why these great companies chose FirstMerit Bank. Software, biotech led national investment Michigan’s VC world was less frenzied than that of Silicon Valley’s, and its firms skew toward health care and life sciences, as opposed to software and IT. A portfolio company of: A portfolio company of: “Valuations here tend to be lower. There’s not as much capital chasing the deals that are here,” said David Par- sigian, head of the ven- $68,000,000 Senior Secured Credit $112,500,000 Senior Secured Credit ture capital practice at Facilities provided by Sponsor Finance Facilities provided by Sponsor Finance Honigman Miller Schwartz Participant Participant and Cohn LLP in Detroit. June 2013 July 2013 The rise in the nation- al numbers last year was largely driven by invest- ment in software and In- ternet businesses, with biotech also a leading Parsigian sector of activity last year, said Mark McCaffrey, global soft- A portfolio company of: ware leader in the San Francisco office of PricewaterhouseCoopers. Businesses associated with buzzwords like “cloud,” “big data” and “disruptive technologies” began to catch the attention $25,000,000 Senior Secured Credit $23,000,000 Senior Secured Credit of VCs as the value of these companies’ in- Facility provided by Business Credit Facility provided by Business Credit novative technologies became clear, he September 2013 December 2013 said. Declining uncertainty over the na- tional economy helped, too. McCaffrey said companies doing things To learn more, contact: like using analytics to offer insights into Jacqueline Hopkins clients’ customer bases or developing mo- , Managing Director, bile technologies were examples of innova- Sponsor Finance Group, FirstMerit Bank tions coming out of the software sphere. at 312-429-3618 or Consumer products and social media were jacqueline.hopkins@firstmerit.com part of the mix: Pinterest and Uber garnered A portfolio company of: some of the biggest national investments in Joseph Kwasny, 2013, according to the MoneyTree report. SVP and Business Development Manager, Software innovations are affecting a Asset-Based Lending, FirstMerit Bank broad range of industries, as has been Senior Secured Credit Facility 330-849-8736 provided by Business Credit at or widely reported, and the companies be- joe.kwasny@firstmerit.com December 2013 hind them finally started to pick up invest- ment steam last year as investors saw strong returns on investment and valua- tions coming from that sector. Tech attracts investors Investors’ move last year toward soft- ware companies in the center of the big data, cloud and mobile computing move- firstmerit.com ments will continue not just in 2014, but in Member FDIC the years to follow, said Tony Grover, man- P/N 50267 aging director at Ann Arbor-based RPM Ventures, which invests in these kinds of

SEE NEXT PAGE Page 22 SPRING 2014 FALL 2006 20140310-SUPP--0021,0022,0023-NAT-CCI-CD_-- 3/3/2014 4:01 PM Page 3

FROM PREVIOUS PAGE attracted about half of the money — fund will target early-stage IT companies. $116.4 million out of a total $238.9 million It’s still too early to see where things companies in areas such as B2B services, — and companies in the early and expan- are headed in Michigan in 2014, Parsigian cloud infrastructure, online market- sion stages took most of the remainder. said, but no major shifts are in sight. places and automotive IT. By deal volume, numbers were similar “There’s no reason to see it depressed “We’re very bullish that the trends we in both years. The lion’s share — 44 out or particularly robust,” Parsigian said. saw come together in 2013, we’ll see in of 68 deals — went to early-stage compa- “I’d be surprised if the outcome is dra- the next decade,” Grover said. nies last year in Michigan. Expansion- matically different from 2013.” Michigan could become an interesting stage companies drew 12 more. Jones at the MVCA said anecdotally place to see these trends spread into auto- Of note: 16 deals came from Grand she’s hearing that VCs will be busy mak- motive IT, a specialty area of Grover’s Rapids-based Start Garden, with invest- ing investments this year at a similar firm, with all the buzz around the “con- ments ranging from $10,000 to $30,000. pace as last year. nected car” these days. “That trend is consistent with what we The two leading sectors for VC money “There’s pent-up demand and inter- see on a national basis. Venture capital- in Michigan in 2012 — the most recent est,” he said. “I do expect to see, this year ists were trying to get in earlier than year the association has tallied — were and the next couple of years, there’s go- ing to be a lot of investment in this area.” Michigan’s 2014 probably will be steady as it was last year but doesn’t ap- DEAL BREAKDOWN pear to have any single major event on Michigan National the calendar, like the IPO of Plymouth Year No. of deals/Amount invested No. of deals/Amount invested Township-based pharmaceutical compa- 2011 35/$83.1 million 4,001/$29.7 billion ny Esperion Therapeutics Inc. last year that 2012 49/$238.9 million 3,858/$27.3 billion raised $73 million, Grover said. 2013 68/$102.5 million 3,995/$29.4 billion “There’s nothing I know of that might pop and create a big up or down,” he said. Source: MoneyTree report from the National Venture Capital Association and PricewaterhouseCoopers He expects his firm to have an active year of investing but does not have a set number of deals it plans to make. what they had historically. Competition life sciences, which picked up 40 percent around these investments is starting to of investments, and IT, which grabbed 36 Early-stage investments increase,” McCaffrey said. percent, and that doesn’t look likely to The increase in deal count shows the change much, she said. The numbers are probably understat- ecosystem is growing, Jones said. “We’ll probably see IT grow a little, but ed, as some firms have yet to report deals The slide toward earlier stages signals the breakout will probably be similar to made at the end of the year, said Carrie a refilling of the pipeline, and that means 2013,” Jones said. Jones, executive director of the Michigan the next three to five years should see The MoneyTree report pegs software Venture Capital Association in Ann Arbor, more growth-stage investments as these firms at picking up the most investment which will publish its annual report with early-stage companies seek larger money last year, at $35.6 million of the comparable data in May. rounds, Grover said. $102.5 million total. The related areas of A lot of deals were rushed before the end “That’s a very encouraging statistic,” biotechnology and medical devices to- of 2012 to avoid capital gains tax increases Grover said. “This is such a long-term gether picked up $47.8 million. expected to kick in last year, said Charles business, you have to look at bigger Health care is ripe for IT investments Rothstein, senior managing director at trend lines.” and could be a hot sector this year, given Farmington Hills-based Beringea LLC, the Since investment numbers can bounce the changing regulatory pressures in the state’s largest venture capital firm, with a lot from year to year, it’s important to industry. $550 million under management. remember where Michigan was 10 years “There’s so much buzz around the It took some time for the investment ago compared to 2013, Grover said. New health care market ... there are huge prob- world to digest those deals before jump- “fund-of-funds” vehicles have come into lems begging for solutions,” Parsigian ing back into new deals. being, outside VC firms have opened of- said. “There’s going to be substantial buy- Rothstein said 2013 was a normal year fices, and seed-stage funds have appeared ers for those solutions. Whether that will of deals done at all stages nationally and in Michigan since 2003, he said. pop this year or next is hard to know.” in Michigan, and he expects Michigan’s The health care industry has been slow rebounding economy to be good for to join the digital age, but now that it’s young, venture-backed companies. “At Growth expected for life beginning to, it is a sector to watch, said times of expansion,” he said, “all compa- sciences Grover at RPM, which has one health nies look better.” care IT play in its portfolio with Ann Ar- The year ahead could see more exits, In 2003, Michigan saw $95 million in- bor-based ArborMetrix Inc. pending conditions. “If interest rates vested in 18 deals. Eleven firms were In addition to health care and life sci- stay low and the stock markets continues based here and no outside firms had of- ences, Roth said new technologies in to perform well, it makes for a good exit fices in the state, compared to 21 based manufacturing could get funding this environment,” Rothstein said. here now and 11 outside firms with offices year, as well. It is Michigan, after all. One thing Michigan had in common here, including the recently announced Last year was a return to a normal lev- with the rest of the country was a lean to- arrival of Draper Triangle Ventures, an arm el of investment for Michigan, he said. ward early-stage investments. In a break- of influential Silicon Valley venture capi- Judging from conversations with venture down of companies by stage — seed, early, tal firm Draper Fisher Jurvetson. capitalists, the late part of this year expansion and later — $49.9 million of the The arrival of Draper Triangle Ven- should see exits developing out of the in- $102.5 million committed last year went tures will make things more interesting vestment activity of 2011 and 2012, and toward early-stage companies. Companies in Michigan this year, Parsigian said. The that should continue in 2015, Roth said. in the expansion and later stages drew the firm plans to open offices in Detroit and “A year from now, looking back and bulk of the rest of the money. Ann Arbor, and has raised $75 million for seeing the number of exits up significant- That was a marked change from 2012 a new fund it hopes will reach $100 mil- ly will be one of the things we see this in Michigan, when later-stage companies lion, Crain’s reported in January. The year,” he said. SPRING 2014 Page 23 FALL 2006 20140310-SUPP--0024,0025,0026,0027,0028-NAT-CCI-CD_-- 3/4/2014 3:01 PM Page 1

WATCH LIST | AGRISIGHT INC. Fields of vision FarmLogs soaks up data, funding

ational venture investment num- bers were driven up last year by Ninvestors looking to be part of the buzz surrounding “disruptive” technolo- gies that could change the way any num- ber of industries do business. One of those technologies comes from Ann Arbor-based AgriSight Inc., and its target industry is a little off the beaten investor path: farming. The company is better known by its product — FarmLogs, a Web-based farm management software that helps farmers track a range of data and better manage their operations. FarmLogs soaks up data from public sources to give farmers ready, easy-to-view displays of information on market prices, rainfall, crop rotations and inventory. The National Weather Service, for exam- ple, uses radar to provide rainfall data right down to the level of specific fields. But the information, raw and intended to predict floods, isn’t useful in its basic state, said Jesse Vollmar, one of AgriSight’s founders. COURTESY OF AGRISIGHT INC. FarmLogs takes the information and “Agriculture is an industry that gets overlooked by the tech community,” says AgriSight Inc. co- spits it out in a readable format. founder Jesse Vollmar. AgriSight’s FarmLogs Web-based software is designed to help farmers Similarly indecipherable are data from track data and better manage their operations. the U.S. Department of Agriculture that use satellites to detect what crops are grow- the inner circle of Silicon Valley entre- As a Y Combinator participant, the ing on fields. preneurs and investors in exchange for a company also received funding from An- “A lot of these things have been avail- slice of equity. dreessen Horowitz in Menlo Park, Calif., able for a while now. They just weren’t Reddit and Dropbox are among the Y and Start Fund, set up by social media in- being utilized,” Vollmar said. “Agricul- Combinator alumni. vestor Yuri Milner to invest in every Y ture is an industry that gets overlooked Vollmar and Koch attended Y Combi- Combinator company. by the tech community.” nator during the first three months of A Series A round raised an additional The heightened connectivity and im- 2012, the same time they officially $4 million, AgriSight announced in Janu- proved broadband speeds of the past five launched their business. They stayed in ary. Drive Capital of Columbus, Ohio, led years or so have made it possible to use this Mountain View for an additional month the round, joined by Huron River and data in the field, where farmers now can before moving FarmLogs to Ann Arbor Hyde Park. AgriSight will use the cash to use smartphones to look up information. to be closer to Midwest farmers. further develop the product and double Vollmar, who grew up on a farm, said Nearly all the farmers who use Farm- the number of engineers working on it. existing software is still based on desktop Logs have gotten it for free. AgriSight The company had no full-time employees computers and requires farmers to enter gives it away so it can build up more data as of early February. a lot of data. from farmers and make a better product. No more rounds of funding are planned. “It’s so far behind what technology can The company wants to build the dominant “I’m sure there will be future rounds of fi- do,” he said. platform in the agriculture industry, not nancing, but we’re very well-funded now,” AgriSight founders Vollmar and Brad just a product used on such a platform. Vollmar said. Koch put their concept through the Sili- “We don’t want to push people into AgriSight is not looking for a quick con Valley wringer by attending — or, paying too early. We want to get the prod- exit through acquisition, aiming to build more accurately, being allowed to attend uct right first,” Vollmar said. the product as much as it can. “We’re not — Y Combinator in Mountain View, Calif. AgriSight raised $1 million in a seed in this to flip it,” Vollmar said. Startups apply for entry, and if accept- round led by Huron River Ventures in Ann An down the ed into one of the company’s three-month Arbor and joined by Hyde Park Venture road would be more suited to this plan. programs they get funding and access to Partners and Hyde Park Angels of Chicago. — Gary Anglebrandt

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WATCH LIST | ABLATIVE SOLUTIONS INC. A kin-do attitude Fischell clan drives interest in medical devices

alamazoo-based Ablative Solutions Inc. is being watched as it attracts Kinvestment dollars. But another big reason to watch this company is the force of the people behind it. Namely, the Fischell family. Tim Fischell, M.D., is a practicing in- terventional cardiologist and CEO of the company. His brother, David, has a Ph.D. in physics and is chairman of the compa- ny. Their father, Robert, has degrees in en- gineering and physics, and the Robert E. Fischell Institute for Biomedical Devices at the University of Maryland is named after him. The Fischells have about 250 medical device patents among them and have started 16 companies and counting. They, along with medical device sales executive Kevin Plemmons, founded a company that sold for $30 million in 2012. Kalamazoo-based Ostial Solutions LLC, mak- er of a catheter used to implant coronary artery stents, was sold to South Jordan, Utah-based Merit Medical Systems Inc. The angel investors who’d put $3 million into Ostial — no VCs had participated — made a nice return. Ablative Solutions is working on a medical device that uses fine catheters to

deactivate renal artery nerves — those ERIK HOLLADAY that support the main artery to the kid- Tim Fischell, M.D., CEO of Kalamazoo-based Ablative Solutions Inc., is one member of a family that ney but also contribute to hypertension together is responsible for 250 medical device patents. So far, the Fischells have started 16 — without damaging the artery. companies. In 2013, the company had expected to receive European regulatory approval bar,” he said. “We’re going to have to do The company completed its second in late 2014, which would have paved the a completely unchallengeable trial.” round of financing in February, raising way for U.S. approval. But a January an- Actual sales of Ablative’s device are $9.5 million. That was on top of a Series A nouncement from Minneapolis-based still two to three years away in a best- round in which the company raised $5.3 Medtronic Inc. that testing of its renal case scenario. million. denervation device yielded poor results But Fischell said he is encouraged by Leading the second round was has shaken up the industry. Several oth- Medtronic’s announcement, because Petoskey-based BioStar Ventures and er companies testing renal denervation the method used by the Minnesota- Grand Rapids-based Michigan Accelerator devices have put the brakes on their based medical device behemoth and oth- Fund, which also participated in the first plans. ers is markedly different from Abla- round. Ablative has also reconsidered its tive’s. A follow-on round to bring the B round plan. U.S. approval might be harder to Ablative Solutions uses chemicals to total to $12.5 million might happen this win now, throwing into question the destroy renal artery nerves in a way that year, as some VCs have shown interest, strategy of getting approval in Europe is more precise and less damaging to Tim Fischell said. first. artery walls than the energy-based sys- Exit plans are a ways off, but the most The plan is still being worked out, Tim tems employed by other companies, big likely path would be an acquisition, he Fischell said. and small, working on this problem, Fis- said. “Medtronic’s failure has raised the chell said. — Gary Anglebrandt SPRING 2014 Page 25 FALL 2006 20140310-SUPP--0024,0025,0026,0027,0028-NAT-CCI-CD_-- 3/4/2014 3:01 PM Page 3

WATCH LIST | SWIFT BIOSCIENCES INC.

David Olson likens reading DNA sequences to trying to read a shredded-up phone book of all the phone numbers on the planet. His company, Ann Arbor-based Swift Biosciences Inc., in essence makes those sequences readable. ROBERT CHASE Swift start VC is in DNA of this Ann Arbor bioscience company

wift Biosciences Inc. makes chemical raised $7 million and was led by Boston- 2011 for $205 million. Its CEO at the time, reagents that prepare samples of based Fletcher Spaght Ventures, with the Jeff Williams, now heads up Tangent. SDNA to go into the machines that Mercury Fund, Grand Rapids-based Michi- Makarov was a founder of Rubicon Ge- read the DNA sequences for clinical re- gan Accelerator Fund and the Renaissance nomics Inc., where Roger Newton, chair- search. Venture Capital Fund also participating. man and chief scientific officer at Esperi- David Olson, president and CEO of the Follow-on funding in between the on Therapeutics Inc., sits on the board. Ann Arbor-based company, likens read- rounds topped off the amount raised. The Esperion raised $73 million in an IPO last ing DNA sequences to trying to read a round that closed in October most likely June. shredded-up phone book of all the phone was the company’s last equity round, Ol- The company has 15 employees and numbers on the planet. One thing that son said. three product lines, one launched in 2012 helps computer scanners to read those Olson and Vladimir Makarov, chief and two last year, going to academic and sequences is to tag the ends of them. scientific officer, founded the company corporate customers such as clinical re- Swift makes the tags. based on Makarov’s research. The two searchers and pharmaceutical compa- That’s been a good enough sell to at- founders have roots in the world of Ann nies. tract $13 million in venture capital since Arbor life sciences startups. There’s been plenty of M&A activity the company’s start in 2010 with $400,000 Olson had early roles at ProNAi Thera- for companies like Swift, making an ac- in from angel investors peutics Inc., Accuri Cytometers Inc. and Tan- quisition the most likely exit avenue for based in Southeast Michigan. gent Medical Technologies Inc. Accuri was the company, Olson said, declining to The angel investors were joined by Mer- the prize in one of Michigan’s biggest ex- give a timeline. cury Fund out of Houston in 2010 for a Se- its in recent memory when New Jersey- “It would be natural for the company ries A round that raised $3 million. A Se- based medical device supplier Becton, to exit in an acquisition,” he said. ries B round that closed last October Dickinson and Co. bought the company in — Gary Anglebrandt

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WATCH LIST | PRONAI THERAPEUTICS INC.

tient, and tumor shrinkage in another six patients. The company’s platform for making this drug can be extended to target any IPO in other disease where turning off a gene would be helpful for patients, said Mina Sooch, president of ProNAi and general partner at Apjohn. The company is work- ing on a drug to fight hepatitis B, for ex- ample, since switching off the virus’ the DNA would render it inert. ProNAi has more than 30 genetic targets in its sights, half of them cancer-related, and the other half a mix of cardiovascular, infectious and inflammatory diseases. Phase-two studies of ProNAi’s anti- genes? cancer drug are ongoing at three sites. The goal is to win regulatory approval, either from European or American regu- lators, in three or four years. ProNAi is working on a new round with a target of $30 million to pay for Investors eye more studies and hiring. The company also is considering an ProNAi after IPO, should market conditions become LON HORWEDEL attractive enough to go for it, Sooch said. ProNAi Therapeutics President Mina Sooch: The company is considering the second successful trial “We don’t want to be sold and just to be done half of this year as the timeframe for this with it.” possible IPO. roNAi Therapeutics Inc. has been Barring that, ProNAi also is looking to watched by investors this year as term DNAi, or DNA interference, the use find a major pharmaceutical company Pthe company, coming off a success- of DNA to interfere with disease-causing that would help further develop and man- ful trial for its cancer-fighting drug, genes. ProNAi’s technology is based on ufacture ProNAi’s drugs in exchange for looks at a possible IPO. the work of Reza Sheikhnejad, a scientist rights to sell them on a royalty basis. The Plymouth Township-based compa- who worked at Wayne State University and ProNAi is not seeking exit by acquisi- ny raised $12.5 million in a round that the Karmanos Cancer Institute and remains tion, however. closed in December and was led by Capi- a shareholder in the company. Sooch said most acquirers would be tal Midwest Funding in Milwaukee and ProNAi’s drugs contain DNA frag- seeking to absorb one product, such as joined by Apjohn Ventures of Kalamazoo. ments that target disease-causing genes ProNAi’s anti-cancer drug, and call it a The company previously raised $20 and deactivate them. Its main product is day. The company’s platform for produc- million in several rounds starting from an anti-cancer drug called, for now, ing drugs has too much potential for that, its founding in 2004. Michigan-based an- PNT2258. A human trial of the drug last she said. gel investors have provided the bulk of fi- year on 12 non-Hodgkin lymphoma pa- “We don’t want to be sold and just to be nancing. tients led to complete remission in three done with it,” Sooch said. ProNAi’s name is a reference to the patients, partial remission in one pa- — Gary Anglebrandt

WATCH LIST | DELPHINUS MEDICAL TECHNOLOGIES INC. New stage ahead? FDA OK looks to spell sales for Delphinus

t was a long time coming, but Delphi- tect breast cancer. Delphinus’ device looks like a bed with nus Medical Technologies Inc. started Delphinus formed in 2009, but develop- a hole near the top. Patients lie down, I this year off with a big step toward en- ment of its technology began 10 years with a breast through the hole. The tering the revenue stage. earlier at the Barbara Ann Karmanos Can- breast is immersed in water and sur- The Plymouth Township-based compa- cer Institute in Detroit. Its product aims to rounded by a ring containing 2,048 ultra- ny announced Jan. 7 that the U.S. Food & more accurately and less painfully detect sound sensors, which generate data that Drug Administration had cleared the com- breast cancer through 3-D ultrasound are translated into images. pany to sell its SoftVue device used to de- imaging. SEE DELPHINUS, PAGE 28 SPRING 2014 Page 27 CR FALL 2006 20140310-SUPP--0024,0025,0026,0027,0028-NAT-CCI-CD_-- 3/4/2014 3:01 PM Page 5

ROBERT CHASE Mark Morsfield assumed the CEO job at Delphinus Medical Technologies last October.

DELPHINUS, FROM PAGE 27 Before the company was spun out of Kar- manos, $19 million was spent on research, with money coming from private donors, the Michigan Economic Development Corp., the Susan G. Komen Breast Cancer Foundation, the National Institutes of Health and the National Cancer Foundation. After the spin-out, Delphinus raised $8 million in a 2010 round led by Ann Arbor- based Arboretum Ventures LLC, with North Coast Technology Investors LP of Ann Arbor and Beringea LLC of Farmington Hills par- 1 ticipating. The same firms joined in a second round of $11 million that closed last September. 2 GE Capital also joined in that round. With the new FDA blessing in hand, 3 sales are on track to begin at the end of this year, said CEO Mark Morsfield, who re- placed William Greenway last October. The initial price point per machine is $400,000. No volume or revenue targets have been set, but the numbers will be modest at first, Morsfield said. Clients will be hospitals and outpatient clinics. Miller Technical Services Inc. in Canton Township has been given the contract to make the SoftVue device. Delphinus will do another round of fundraising as it ramps up manufacturing and sales, but no target for the next round has been decided. The company employs 26 people, and that number will rise as the company ramps up.

Page 28 SPRING 2014 FALL 2006 20140310-SUPP--0029,0030-NAT-CCI-CD_-- 3/5/2014 1:05 PM Page 1 CROWDFUNDING Mich. politicians love it; business community not so sure By Brian Edwards based Varnum LLP. Each offering will need to involve a bro- hen Gov. Rick Snyder, a former Michigan’s crowdfunding law ker-dealer or funding portal, counsel from venture capitalist, signed Public The state’s new crowdfunding law accountants and lawyers, limited direct ad- WAct 264 into law in December, circumvents the federal securities rules, vertising and regular disclosures to share- Michigan became the fourth state to cre- but there still are a variety of holders after the offering is completed. ate an intrastate exemption for equity requirements and limitations for Because unregistered securities can al- companies. crowdfunding. The new law, which al- ready be advertised and offered to ac- lows Michigan companies to sell shares Ⅲ Intrastate requirements: Issuers must credited investors under federal regula- be headquartered in Michigan and the over the Internet to non-accredited in- tions, the benefit of equity crowdfunding offering may be made only to Michigan is primarily limited to selling securities vestors, sailed through the state’s nor- residents. An issuer must generate 80 mally combative legislature in two percent of its revenue, have 80 percent to non-accredited investors over the In- months with only one nay vote. of its assets, and use 80 percent of the ternet, Ashby said. While the state’s politicians are nearly proceeds inside the state of Michigan. “Solely from a cost-benefit perspective, unanimous in their zeal for equity Ⅲ Maximum offering amounts: If the I do not expect to see a significant market crowdfunding, some Michigan profes- issuer makes audited financial develop for crowdfunded offerings of se- sionals who buy, sell and raise equity statements available to investors as part curities,” he said. capital for a living are sounding a bit of the offering, the maximum is $2 “There are simpler ways to raise money more leery these days. million. If no audited financials are under the private placement rules which Longtime venture capitalist Jack shared, the maximum is $1 million. have existed for years,” said Tracy Larsen, Issuers can’t accept more than $10,000 Ahrens, who runs T-Gap Ventures in Kala- a Michigan-based corporate attorney who from non-accredited investors. mazoo, is one such skeptic. serves on the management team of nation- Ⅲ State notice: At least 10 days before While Ahrens acknowledges that so- al law firm Barnes & Thornburg LLP. the offering, the issuer must file notice The proposed federal crowdfunding re- cial or philanthropic crowdfunding sites with the state of Michigan, including a like Kickstarter.com have plenty of merit, $100 filing fee, a copy of the disclosure quirements and the $1 million limit “are he’s a bit more pointed when it comes to to investors, a copy of the escrow much too restrictive and onerous on is- equity crowdfunding, when investors ac- agreement and a notice of whether the suers to have a meaningful impact,” he tually take a stake in a company. issuer plans to use a website. said. “I have serious doubts whether “I think a lot of people are going to get Ⅲ Resale restrictions: The securities crowdfunding will ever be a useful or their clocks cleaned,” he said with a sold may not be resold within nine practical way to raise money.” laugh. “People that think they’re going to months to any non-Michigan resident. While its practicality may be a matter put $5,000 into the next Apple are kidding Ⅲ Continuing disclosure: After the of debate, few seem to argue that equity themselves. offering, the issuer must provide crowdfunding will happen and that the “If you look at any of the big successful quarterly reports to its investors and the next few years will be interesting. state of Michigan for as long as the companies like Facebook or Twitter, these “Lots of people are lined up to get in shares remain outstanding. companies take in hundreds of millions of the space, but I predict it will be the ‘wild (investor) dollars along the way. Crowd- Sources: Varnum LLP, state of Michigan wild west’ for at least funding is just not going to get you there.” a couple of years,” That sentiment hasn’t deterred Michi- nism to raise funds, he said. said attorney Joe Voss gan’s legislature. A month after Snyder “As we have already seen in other coun- of the Detroit-based signed the so-called Michigan Invests Lo- tries globally and do- law firm Clark Hill PLC. cally Exemption legislation, the new mestically with equity “And the first major law’s primary sponsor followed it up with crowdfunding for ac- fraud that is commit- another crowdfunding bill. credited investors, ted through equity In January, Rep. Nancy Jenkins, R- there is a need for capi- crowdfunding will Clayton Twp.,, introduced House Bill No. tal for the startup and generate a whole lot of ‘We told you so’ talk, 5237, which would allow the formation of a small-business commu- Voss Michigan-only intrastate stock exchange nity and a willingness too.” where the newly exempt stocks could be from the crowd to pro- Don’t worry about fraud or scam artists, listed, bought, sold and resold. The new vide funds in incremen- venture capitalist Ahrens said, because bill, she promised in a Detroit News op-ed tal amounts,” he said. there’s a much scarier problem ahead for Melfi piece, “would set Michigan apart as the But there are poten- many involved in crowdfunded deals. model for local investment innovation.” tial downsides for crowdfunded compa- “Lots of small businesses are going to Among the fans of crowdfunding is nies. raise money through crowdfunding, and Michael Melfi, principal at the Birming- Having a gaggle of small investors will many of those small businesses are going ham-based law firm Melfi Associates. Melfi deter many VCs from getting involved in to be successful, but the real question is practices intellectual property law and a company, Ahrens said. “It’s too much how are you (as an investor) going to ever serves on the board of directors of the Dal- work to get all the small shareholders get any money out of the company?” he las-based National Crowdfunding Association. corralled up to get anything done.” said. He consults with platforms and has a book The equity crowdfunding model also “Remember, there’s a big difference coming out this year on crowdfunding. comes at a high cost, said Seth Ashby, a between having a successful business Expect this to grow as a new mecha- corporate attorney at Grand Rapids- and having a liquidity event.” SPRING 2014 Page 29 FALL 2006 20140310-SUPP--0029,0030-NAT-CCI-CD_-- 3/5/2014 1:05 PM Page 2

Crowdfunding spawns a sea of portals

By Mark Sanchez A former securities As crowdfunding emerges, it already broker who now works has seen a few starts and stops in Michi- he emergence of crowdfunding pro- as a commercial real es- gan. vides not only a new mechanism tate agent, Woods is Detroit-based Fundington.com, which Tfor startups to solicit funding, but principal of Crowdfund- launched in 2012, is on hold, said Birm- an opportunity for entrepreneurs to ing Services LLC. ingham attorney Michael Melfi, who co- serve a new and growing market. He sees his crowd- founded the site and served as general funding platforms as en- counsel for the platform’s organizers. And with that, a handful of portals are abling small businesses Another platform, Royal Oak-based in the works. — from manufacturers eRaise.com, “is currently in a private beta Among them, equityli.st is an equity- Woods to retailers such as a while we polish the system,” states a mes- based platform now in beta testing that ag- bakery or restaurant — sage on the site. gregates prospective investment opportu- to raise capital to finance an expansion or In Grand Rapids, an equity-based nities. capital purchase. crowdfunding platform, relayfund.com, en- Another crowdfunding platform is In the Upper Peninsula, Houghton- visioned by Jeff Lambert, principal in the crowdrise.com, a Royal Oak-based fundrais- based Michigan Technological University op- investor and public relations firm Lambert ing site for charities and causes. A May erates Superiorideas.org, a platform for Edwards & Associates Inc., altered course af- story by Forbes.com ranked university-based researchers, whether ter the U.S. Securities and Exchange Commis- crowdrise.com, which launched in late students or professors, to seek support sion in the fall proposed rules for equity 2009, among the top 10 crowdfunding sites. for a research project. crowdfunding. Actor Edward Norton is one of the Launched in October 2012, Superior Lambert, like many in the crowdfund- founders of the site. Ideas has so far listed 32 projects that col- ing movement, views the SEC rules as In Kalamazoo, Thell Woods plans to lectively raised $73,000. Four projects onerous and too restrictive. He altered create localized crowdfunding platforms have been fully funded at a combined his business plan to focus relayfund.com for small businesses and not-for-profit $51,000, said Natasha Chopp, research de- on providing services to the crowdfund- organizations to seek funding from local velopment and marketing managing at ing industry, such as promoting or devel- investors or donors. He’ll start with a lo- Michigan Tech. oping a marketing campaign for a compa- cal site in Kalamazoo and branch into Superior Ideas is open for use by any ny’s solicitation. other markets, Grand Rapids and Detroit university researcher around the U.S. who “We’re going to be making the picks included, using the website is seeking funding for a research project, and shovels for the crowdfunding indus- c3funding.com. Chopp said. try on the equity side,” Lambert said.

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Chicago’s Baird Capital hires Longtime auto exec Simon DEAL exec to source Mich. deals Boag joins LaSorda VC fund Baird Capital, a Chicago investment Simon Boag has been named manag- firm with more than $2.8 billion under ing director of IncWell LLC, an early- management in its private equity and stage venture capital fund founded in venture capital funds, hired veteran Birmingham last year by former BRIEFS Ann Arbor entrepreneur David Gregor- Chrysler Group LLC CEO Tom LaSorda. ka to source deals throughout Michigan. Boag has more than 25 years in the eals didn’t slow down through Gregorka was a co-founder in 1998, auto industry, including executive posi- the long, cold Michigan winter. along with now-Gov. Rick Snyder and tions at Chrysler and General Motors Co. D The following deals were covered University of Michigan professor Victor IncWell, which invests in seed-stage in previous editions of Crain’s Detroit Strecher, of Ann Arbor-based HealthMe- startups, began with less than $5 mil- Business and MiBiz: dia Inc., which was sold to Johnson & lion, said LaSorda, who plans to go to in- Johnson in 2008. stitutional investors next year and raise a fund of $25 million or more. Roger Penske is one of IncWell’s lim- Fund news Credit Suisse sells fund ited partners. management group Draper Triangle plans The group that helped launch and run Huntington commits $25M several of Michigan’s investment funds Ann Arbor, Detroit offices has been sold from one firm to another. to new microloan program Draper Triangle Ventures, a Pittsburgh- Zurich-based Credit Suisse Group AG Columbus, Ohio-based Huntington based affiliate of one of the oldest and (NYSE: CS) has sold its New York City- Bank has committed $25 million to help best-regarded venture capital firms in based Customized Fund Investment launch a lending program with the Silicon Valley, is opening offices in Ann Group to Chicago-based Grosvenor Capi- Michigan Economic Development Corp. to Arbor and downtown Detroit and is tal Management LP. spur small-business job growth. deep in due diligence on its first invest- The deal closed in January. The sale The bank’s commitment fits into a ment in the state. price was not disclosed. larger program called the Pure Michi- The firm has raised $75 million of The Customized Fund Investment gan Micro Lending Initiative. It will pro- what it hopes will be a $100 million Group has about 140 employees and vide $250 million in statewide lending. fund. It hopes to decide on a downtown about $18 billion under management. Detroit location and then open a satel- It manages the $95 million Venture lite office in Ann Arbor. Michigan Fund I, the $120 million VMF Huron Capital to build Veteran venture capital manager II, the $109 million 21st Century Invest- firm focused on energy Jonathan Murray, who has been a man- ment Fund and $295 million in the three Detroit-based Huron Capital Partners aging partner for Cleveland-based Early Michigan funds that are LLC will commit up to $100 million from Stage Partners, will move to Detroit to co-managed with Farmington Hills- its newest fund to build a platform com- head Draper’s Michigan operations. based Beringea LLC. pany by buying companies in the U.S. Murray’s focus has been information The group was renamed the GCM Cus- and Canada that focus on energy effi- technology, and Draper Triangle’s new tomized Fund Investment Group and will ciency and providing services to the fund, Draper Triangle Ventures II LP, remain in New York. Kelly Williams electricity grid. will invest almost exclusively in early- will continue as president of the group. The platform company, Albireo Energy stage IT companies. There will be no change in management of the Michigan funds. LLC, is named for Albireo, a twin star 430 light years from earth that is visible to Bhargava funds company to the naked eye. Huron will invest in Al- invest in water, energy deals Bund fund Plymouth Mgmt. bireo from its fourth and largest fund, ventures into version 3 the $500 million Huron Fund IV LP. The billionaire behind 5-Hour Energy is funding a private equity company, Farm- Ian Bund, the senior statesman Kalamazoo pair push new ington Hills-based Oakland Energy and Wa- among Michigan’s venture capitalists, ter Ventures LLC, which will invest up to is at it again. His Ann Arbor-based ven- flight of angel investing $100 million in individual deals in compa- ture capital company, Plymouth Manage- Citing the need to improve the access nies around the world that are focused on ment Co., has launched its third, and to local capital for startup businesses, energy conservation and water treatment. what it plans to be largest, fund. Western Michigan University’s John Manoj Bhargava is funding the firm, Plymouth Venture Partners III is tar- Mueller and Michigan Medical Device Ac- which reportedly has signed nondisclo- geting a size of $60 million. Fund II celerator Director Kevin McLeod want to sure agreements with several Michigan raised $41 million and Fund I $23 mil- revive angel investing in Kalamazoo. companies about possible investments. lion. The third fund will continue the Mueller and McLeod are working to When asked how much in total he was strategy of investing in growth-stage bring together founding members as in- willing to invest in portfolio companies businesses in the Great Lakes region. vestors in an angel network that would for Oakland Energy, Bhargava said: “The Bund, 69, was honored last May with invest in startups. The group could begin limiting factor isn’t capital. The limiting the lifetime achievement award at the making investments sometime in 2014, thing is how much can we do without sixth annual Crain’s Detroit Business said Mueller, an associate professor of running out of brainpower. We need to M&A Awards. He was recruited to Michi- business management at WMU. have the right management. But if some- gan in 1976 to join one of the two small The effort comes after First Angels, an thing really remarkable comes along, venture capital firms then operating in we’ll figure out a way to make it work.” the state, Midland-based Doan Associates. SEE PAGE 33 SPRING 2014 Page 31 FALL 2006 CDB Living In The D_New CD Magazine sized 3/4/2014 8:52 AM Page 1

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FROM PAGE 31 angel group formed in 2007 by Southwest Michigan First, largely faded from the scene during the recession after making a num- ber of investments in startup companies. VC investments K-zoo med device firms net $6M from unidentified investors Undisclosed investors put nearly $6 mil- lion into three medical device companies from the Kalamazoo area during the fourth quarter of 2013, according to the most re- cent PWC Money Tree report published by Creating economic opportunity in West Michigan. PricewaterhouseCoopers LLP. Axenic Dental Inc., a maker of disposable For nearly 30 years, The Right Place has been a strategic dental products, received $3.45 million from undisclosed investors. Ablative Solu- leader in advancing West Michigan’s economy. We are your tions Inc., which is developing a new single source for services, information and support in the method to treat hypertension, received $2 region. Contact us to learn about your future in West Michigan. million from undisclosed investors. Real- Bio Technology Inc., which is developing cell and tissue culture technologies, received $490,000 from an undisclosed investor. www.rightplace.org Vending technology firm 616.771.0325 completes Series A round Troy-based 365 Retail Markets, a vending and food service technology company, completed a “multimillion-dollar” Series A funding round in February, according to a statement from the company. The round was led by Plymouth Ventures Partners LLP, which provided seed funding to 365 Retail in 2011. Revenue for 365 Retail was more than $10 million in 2013. M&A Experience In Your Corner.® Touchscreen business attracts Michigan funders We routinely represent and advise clients on transactions with values exceeding $100 million. A few in 2013 included: Farmington Hills-based Beringea LLC and Ann Arbor-based Plymouth Venture Partners ■ Represented Michigan manufacturer of offi ce furniture, equipment participated in the funding of Elmhurst, Ill.-based UICO, which supplies touchscreen and home furnishings in its acquisition of a New York-based supplier technology to Fortune 1000 clients. of performance-driven textiles for commercial interiors ($156 million). The funding took in more than $5 million in January from the two firms, in addition ■ Represented Michigan manufacturer of medical device products in to Chicago-based Hyde Park Angels, accord- its sale to a leading global surgical implant company ($135 million). ing to a report in Crain’s Chicago Business. ■ Represented global manufacturer of high tech solutions for the automotive, furniture and appliance markets in a joint venture with Other news a billion-dollar global manufacturer. Aastrom Biosciences secures $15M equity finance deal Ann Arbor-based Aastrom Biosciences Inc. (Nasdaq: ASTM) reached an agreement in ® January to sell up to $15 million of its com- Legal Experience In Your Corner. First Tier Ranking mon stock to Lincoln Park Capital Fund LLC, a in Corporate Law Chicago-based . Contact Pete Roth at [email protected] ■ Metro Detroit ■ Grand Rapids ■ Kalamazoo ■ Grand Haven ■ Lansing SEE PAGE 34

SPRING 2014 Page 33 FALL 2006 20140310-SUPP--0031,0033,0034,0035-NAT-CCI-CD_-- 3/5/2014 4:28 PM Page 3

Investment fund pumps $20M into growing small firms in first year

row Michigan LLC, a Plymouth-based dustries and have payback periods of Said Grow Michigan CEO Russell investment platform founded in three to five years. Youngdahl Jr.: “Reasonably priced GFebruary 2013 and funded by the The program was launched with coop- growth capital for Michigan’s small-busi- Michigan Strategic Fund and 13 regional or eration from the Michigan Economic Devel- ness community was much discussed but community banks in the state, provided opment Corp. to help fill a void in avail- not available. We have been successful in $20.1 million in growth capital to 12 small able growth capital for small but growing proving that with the proper underwrit- businesses in its first year of lending. companies. ing and partnerships, we can accelerate That money was leveraged into Participating institutions are Fifth growth in Michigan by filling the capital $141 million of growth capital for those Third Bank, PNC Bank, Huntington Bank, The needs for small business.” businesses, which employ more than PrivateBank, Crestmark Bank, Chemical Grow Michigan was founded by 1,000 workers in Michigan. The loans Bank, Independent Bank, NorthStar Bank, Youngdahl, founding and managing came with commitments to add 250 jobs. The Bank of Holland, The Bank of Northern member of NorthStar Capital LLC; Henry Seven of the investments were made in Michigan, Mercantile Bank of Michigan, First Brennan III, a partner in Howard and low- and moderate-income areas. National Bank of Michigan and OSB Commu- Howard Attorneys PLLC; David Treadwell, Grow Michigan has $35.7 million com- nity Bank. former CEO of EaglePicher Corp.; and E. mitted by its funders to provide growth “Working with Grow Michigan has al- Mark Gregory III, formerly executive capital in the form of subordinated and lowed PNC Bank to expand the reach of vice president of Comerica Bank. mezzanine loans, made in conjunction its small-business lending while support- For information on the program, com- with senior bank debt. ing our community redevelopment activi- pany executives can go to growmicapi- Grow Michigan’s loans range from ties,” Ric DeVore, president of PNC’s east- tal.com. $500,000 to $3 million across a range of in- ern Michigan region, said in a release. — Tom Henderson

FROM PAGE 33 Compuware sells 3 units $173.1 million transaction expected to close in the second quarter, pending ap- The purchase agreement, along with a to LA private equity company proval by United shareholders and feder- registration rights agreement, allows al regulators. Aastrom to sell its shares from time to Detroit-based Compuware Corp. an- The acquisition doubles Old National’s time on market-based terms over a 30- nounced in January that it has sold three presence in Michigan. It has 18 branches month period. Aastrom intends to use business units to Marlin Equity Partners, a in southwest Michigan. the funds to help advance its Phase 2b ix- Los Angeles-based private equity compa- CELL-DCM clinical trial in patients with ny, for $160 million. Marlin Equity has advanced heart failure due to ischemic $2.6 billion under management. Companies get $1M in dilated cardiomyopathy, as well as for The businesses being sold are the other corporate purposes. Changepoint, Uniface and professional ser- prizes in Accelerate Michigan The company also revealed in a federal vices units. In November, winners were named in filing that its chief scientific officer, Ron- the Accelerate Michigan Innovation Competi- nda Bartel, stepped down Jan. 1, 2014. IPO of Troy’s Talmer Bank tion. Bartel will continue as a consultant. raises $202 million Top prize went to Varsity News Net- work (see related story on page 36). Henry Ford Health gets $3M Troy-based Talmer Bancorp Inc. (Nas- Other winners at the event: daq: TLMR) in February closed its initial Ann Arbor-based Covaron Advanced to create digital incubator public offering of 15.5 million shares of Materials Inc. received $100,000 as run- Henry Ford Health System in Detroit has Class A common stock at $13 a share. It ner-up. The company, which won $25,000 been awarded a $3 million, three-year raised $202 million in the IPO. at the 2012 Accelerate Michigan event, grant from the William Davidson Foundation About 3.7 million shares were sold by has developed a process for making to establish the William Davidson Center the company and almost 11.9 million high-performance ceramics at far lower for Entrepreneurs in Digital Health. shares by some Talmer shareholders. temperatures than traditional manufac- The bank’s largest shareholder is W.L. turing, reducing energy costs and pro- The center hopes to unite innovators, ed- Ross & Co., the New York City private eq- duction time. ucators and corporate partners from uity firm headed by financier Wilbur REL Inc., Calumet, received $50,000 around the world to create technologies Ross. for finishing third. The company uses ad- and companies focused on the intersection vanced materials to make lightweight ro- of health care and information technology. tors for motorcycles and electric vehi- Another goal of the grant will be to es- Old National buys United cles. tablish an educational curriculum that in- Bancorp in $173M deal Eight companies won $25,000 each tegrates entrepreneurship, health care for having the best business plan in vari- and digital technologies, with programs to Old National Bancorp (Nasdaq: ONB), a ous industries: Inmatech Inc., Ann Arbor; be created for Henry Ford physicians and bank-holding company based in Evans- Wave Aircraft Inc., Birmingham; LiteBrake staff, medical residents, and middle and ville, Ind., acquired Ann Arbor-based high school students in the community. United Bancorp Inc. (OTCQB: UBMI) in a SEE PAGE 35 Page 34 SPRING 2014 FALL 2006 20140310-SUPP--0031,0033,0034,0035-NAT-CCI-CD_-- 3/5/2014 1:07 PM Page 4

FROM PAGE 34 Tech LLC, Hancock; PlanReaction LLC, Ann Arbor; AutoBike Inc., Detroit; ENT Biotech Solutions LLC, Detroit; Pindrop Inc., Boulder, Colo.; and CureLauncher Corp., Bloomfield Hills. Winning the $10,000 People’s Choice Award, based on ballots filled out by audi- ence members, was Ann Arbor-based TurtleCell LLC, which has designed a protec- tive case for smartphones that has a re- tractable, built-in set of headphones. Other finalists were Blaze Medical De- vices, Ann Arbor, which has developed a system for monitoring the quality of blood being stored for transfusion; First Sense Medical LLC, Pontiac, which plans to begin trials on a medical device that uses ther- mal imaging to improve breast cancer de- tection; and Upland Nanotech LLC, Houghton, a maker of sensors to detect food-borne pathogens. Electricity generator wins top prize at MiQuest contest Inventev, a company based in the TechTown incubator in Midtown Detroit whose technology allows commercial trucks to generate electricity for equip- ment at job sites, was the big winner at the Annual Collaboration for Entrepreneur- ship, winning $5,000 for having the best business plan. The annual ACE event was organized by Ann Arbor-based Great Lakes Entrepreneur’s Quest, a nonprofit that has been rebranded as MiQuest after a merger with the Lansing- based Small Business Foundation of Michigan. investment banking + private investment Other winning companies: Plymouth-based Phasiq Inc., which When you're trying to navigate the complexities makes diagnostic tools for detecting pro- of an acquisition or divestiture, you need more tein biomarkers in biological samples, won the second-place award of $3,000. than just an experienced advisor. Campus Commandos, a company based in Detroit, which helps major brands like You need Cascade Partners. Hewlett-Packard and Nike market their prod- ucts to college students, won $2,500 for fin- Cascade Partners' unique combination of ishing third. It is part of Bizdom, the start- transaction, investment and operating expertise up accelerator created by Quicken Loans comes from hands­on experience across the Inc. founder Dan Gilbert. business spectrum. It’s a key difference that helps us drive success. We’ll help you make the right In the competition for best new busi- deal at the right valuation. We’ll even help you ness idea, Kalamazoo-based Micro-LAM source the financing to get it done right. Technologies LLC, which makes tools to im- prove machining for ceramics, glass and Our focus is simple: creating success for our clients. metal, won top prize of $2,000. We do this by fervently supporting your strategic Sentinl LLC, a Detroit-based company objectives and vision, while expertly managing the that incorporates fingerprint technology unique dynamics of each deal. into gun locks, won $1,500 as runner-up. Wave Aircraft Inc. of West Bloomfield, WWW.CASCADE­PARTNERS.COM maker of a hybrid airplane that combines features of amphibian planes with tradi- ACQUISITIONS • MERGERS tional planes to make aircraft that can land DIVESTITURES • RECAPITALIZATIONS anywhere, won $1,000 for finishing third. GROWTH CAPITAL Native Traits LLC, a Kalamazoo-based company that helps farmers use seed strains better suited to their soil and cli- Detroit office: 29100 Northwestern Highway, Suite 405, Southfield, MI 48034 248.430.6266 Chicago office: 1515 W. 22nd Street, Suite 370, Oak Brook, IL 60523 60523 847.282.7040 mate, was named as the best of the six final- ists in the 3-minute elevator pitch contest. Securities offered through Cascade Partners BD LLC ­ FINRA/SIPC SPRING 2014 Page 35 FALL 2006 20140310-SUPP--0036-NAT-CCI-CD_-- 3/5/2014 1:08 PM Page 1 Bits and Pieces News about deals and dealmakers across Michigan Waterford man gets to swim with ‘Sharks’ Grand Rapids- With a business called Man Medals, a Wa- based Varsity terford Township man pitched the in- News Network, vestors on the ABC program “Shark Tank.” which helps The idea: Small medals to reward men schools distribute sports on the for their good deeds, such as taking the Web, snagged garbage out or putting the toilet seat $3 million in down. investment a few It started as a run- months after ning joke with Jim taking the top O’Brien and his wife – prize in the as she would ask, Accelerate “what do you want a Michigan medal?” — and it Innovation Competition. turned into a business. Founder and CEO Going onto the show, Ryan Vaughn is in Man Medal owner the center of the Jim O’Brien, a produc- O’Brien photo wearing er at the Detroit-area white. radio station WCSX 94.7 FM, asked for COURTESY OF VARSITY NEWS NETWORK $10,000 and offered a 10 percent stake in the company. er services company announced that it The “Shark Tank” panelists laughed, Accelerate Michigan win, has reached an agreement that ends a however, that O’Brien has only $25,000 in followed by a deal takeover bid launched in December 2012 sales. He was urged to find out more by Elliott Management Corp., a New York about the business concept before seek- Within three months of taking the top City-based hedge fund. ing more funding. prize in the Accelerate Michigan Innovation The agreement includes the nomina- Competition, a Grand Rapids website at- tion of two new members to Compuware’s tracted $3 million in investment. board of directors and provides for the In February, Varsity News Network creation of a committee to advise the closed on the Series A funding from ven- board on ways to improve performance. ture capital and angel investors that will While it may — temporarily — slow the pay for national expansion and develop- news coverage of Compuware, the compa- ment of a mobile app. ny’s founder, Peter Karmanos Jr., is back The funding was led by Arsenal Venture in the news with his new company. Partners and attracted participation In January, four months after Com- from North Coast Technology Ventures, puware ended his consulting contract, he RSL Venture Partners, Start Garden, Grand launched Mad Dog Technology LLC. Little is Angels, Northern Michigan Angels, First known about the company, other than Step Fund, Muskegon Angels and Michi- that it will have a software focus. gan Angel Fund. VNN, founded by Ryan Vaughn, pro- vides schools a Web-based platform to Huron Capital Partners distribute content on sports programs. In gets a national shout-out two years, it has grown to working with more than 250 high schools in 14 states. Chris Witkowsky, a writer with Thom- The new funding came after VNN in son Reuters’ pehub.com — the influential November won $500,000 in the annual Ac- website devoted to private equity and celerate Michigan business competition venture capital — gave a big shout-out to in Detroit. Detroit-based Huron Capital Partners LLC in December, adding it to his list of the hottest 16 funds in the world. Accord with hedge fund ends Witkowsky wrote, “Huron Capital Compuware takeover bid Partners blew through fundraising on its fourth investment vehicle in 75 days, ex- COURTESY OF MAN MEDALS A treaty, of sorts, has ended the year- ceeding its $400 million target and hitting For the man who has everything except, long campaign calling for a takeover at its $500 million hard cap in January.” perhaps, proof that he regularly takes out the Compuware Corp. (Nasdaq: CPWR). Year in and year out, Huron Capital is trash or, uh, completes the essential to-dos in In January, the Detroit-based comput- the bathroom, there’s Mad Medals. the state’s most active private equity fund. Page 36 SPRING 2014 FALL 2006 CDB Living In The D_New CD Magazine sized 2/27/2014 10:54 AM Page 1

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