20140721-NEWS--0001-NAT-CCI-CD_-- 7/18/2014 7:49 PM Page 1 ® www.crainsdetroit.com Vol. 30, No. 29 JULY 21 – 27, 2014 $2 a copy; $59 a year ©Entire contents copyright 2014 by Crain Communications Inc. All rights reserved What began as a plan to build a new home for the Detroit Red Wings has taken flight as an ambitious plan by the Ilitch family to create or revive five neighborhoods and unify downtown and Midtown. See Pages 20-26 DENNIS ALLAIN RENDERINGS Private equity suppliers provide lesson on cash flow management BY DUSTIN WALSH have decreased the cash conversion cycle, CRAIN’S DETROIT BUSINESS the length of time between investing a dollar into production until a sale of a product is Public automotive suppliers are meeting made, by 5 percent, according to the Ernst & increased demand, expending capital and ex- Young Cash on the Road study released this ecuting deals, thanks to a lesson learned from month. private equity in the market. Peter Kingma, principal of working capital Experts say the success and prevalence of advisory services at EY, said increased com- private equity ownership among suppliers petition from private equity-owned suppliers has pushed publicly traded ones to manage put pressure upon public suppliers to man- cash flow above quarterly earnings — a move age cash differently. that’s creating more cash and more deals. “Over the last five years, North America North American publicly held suppliers See Cash Flow, Page 6 FREE Webinar Thursday, July 31 • Noon - 1 p.m. Sponsored content by: Who Controls the Future of Automotive IP? crainsdetroit.com/newbigthree Powered by: NEWSPAPER 20140721-NEWS--0002-NAT-CCI-CD_-- 7/18/2014 5:30 PM Page 1 Page 2 CRAIN’S DETROIT BUSINESS July 21, 2014 MICHIGAN BRIEFS Medical marijuana bills pass the Lansing State Journal reported. Paramount expects to open the state Senate committee Wolverine steps away from ‘green’ line, closes stores 58,000-square-foot building in Clin- A bill that would allow medical ton County’s Watertown Township marijuana dispensaries to operate Even as its profits grow, Wolverine Worldwide is ates a relatively small amount of revenue and profit as its central shipping and distribu- legally in the communities that planning to be a little less green. for Wolverine,” Grimes said in an MLive.com story. tion point, but will keep its produc- want them and a bill that would al- The Rockford-based footwear maker is ending its Patagonia has no plans to produce the shoe line tion facility near Cooley Law low patients to use edible forms of licensing agreement for Patagonia Footwear, part of in-house or with another contract, said Adam Fetch- School Stadium, with plans to add the drug were approved by a Sen- the Patagonia clothing and equipment line started by er, its global communications director. 20,000 more square feet next door. ate committee last week. fervent environmentalist and “green business” Wolverine embraced Patagonia’s environmentally Ⅲ Private equity investors put House Bills 4271 and 5104 are backer Yvon Chouinard. friendly ideals when the publicly traded company en- $6.7 billion into 50 Michigan-based meant to clarify the 2008 voter-ap- Wolverine announced the move last week, on the tered into the licensing agreement with Chouinard’s companies last year, according to proved law that opened the door same day it said it would close 140 stores, mostly California-based private firm in 2006. That meant do- the Washington, D.C-based Private for medical marijuana in the state. Stride Rite locations, in the next 18 months to in- nating 1 percent of profits — Chouinard’s “Earth tax” Equity Growth Capital Council, MiBiz Last year, the Supreme Court crease profitability. Patagonia’s final line for for using planetary resources — to environmental reported. Investments in the state banned dispensaries in the state, Wolverine will be this fall, CFO Don Grimes said. causes; designing more shoes with renewable, bi- in 2013 were fairly diverse, and pri- and since then dozens have been Patagonia wasn’t a money-maker for a company ogradable and recycled materials; and shrinking the vate equity investing remains in closed down by authorities. The that saw profits grow by 50 percent in the second quar- carbon footprint of its headquarters by using energy- good shape, said Bronwyn Bailey, bills now move to the Senate floor, ter. “Although a wonderful brand, Patagonia ... gener- efficient lights and biodegradable cafeteria utensils. council vice president of research. where Senate Majority Leader Ⅲ Michigan moved up 21 spots, Randy Richardville, R-Monroe, to No. 18, on a list of the most pro- and health expenses would con- of the largest distributors of tobac- Journal reported. Medbio said hir- business states and was named the said he would vote against them in sume 32 percent of the $55 million co products throughout the Middle ing will be ongoing over three years. their current form. most improved state for 2014, ac- general fund, Earley said. East and Africa. ECIG said Man Ⅲ Spectrum Health Medical Group’s cording to a report from the Ameri- “If Flint were to go to bankrupt- FinCo Ltd., the investment arm of new East Beltline facility in Grand can Economic Development Institute Conflict over finances may send cy, that would highlight that this the Mansour Group, will provide it Rapids is to open today, but nearly and Pollina Corporate Real Estate Inc. legacy-cost problem has to be ad- up to $60 million of equity capital, 1,300 visitors got a sneak peak of the Ⅲ The Mackinac Bridge Authority Flint into bankruptcy, EM says dressed more globally,” said Eric with $20 million invested initially new $48 million medical center last delayed its next planned toll in- Flint may be Michigan’s second Scorsone, a Michigan State Universi- and an additional option to invest week following its ribbon cutting crease until at least 2016, keeping city (after Detroit, but you probably ty economist. “Flint’s at the fore- $40 million, the Grand Rapids and dedication, MLive reported. the rate at $4 for passenger vehi- knew that already) to plunge into front, but a lot of cities are on the Business Journal reported. Spectrum’s Integrated Care Cam- cles, The Associated Press report- bankruptcy unless retirees accept same train, and that train is head- Ⅲ Medbio, a contract manufactur- pus will combine several Grand ed. So your next trip to the U.P. cuts in health benefits that threaten ed for the cliff.” er for the medical device and Rapids-area offices under one roof will be a little cheaper for a while. to unravel a balanced budget, Emer- biotechnology industries, is plan- to provide care to patients. gency Manager Darnell Earley said ning a 20,000-square-foot expansion Ⅲ Citing growing sales, Lansing- Find business news from in a Bloomberg News story. MICH-CELLANEOUS to its 45,000-square-foot plant to add based roaster Paramount Coffee around the state at crainsdetroit The specter intensifies the con- Ⅲ E-cigarette maker Electronic up to 45 jobs in Cascade Charter plans to invest $3.5 million into lo- .com/crainsmichiganbusiness. flict over finances in Flint, which Cigarettes International Group of Township near Grand Rapids. The cal operations in part by opening a Sign up for the Crain’s Michi- twice has been under state control. Spring Lake signed an investment project will be a $3.39 million invest- new distribution center near Capital gan Morning e-newsletter at Without changes, retiree pension deal for up to $60 million with one ment, the Grand Rapids Business Region International Airport by Aug. 1, crainsdetroit.com/emailsignup. LET US BE YOUR TECH EXPERTS. We’ll make sure you get the right phone, Internet, and video services for your business. Tech support? It’s included. All at a price you can afford. That’s our job. 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Service provided at the discretion of Bright House Networks. 20140721-NEWS--0003-NAT-CCI-CD_-- 7/18/2014 6:52 PM Page 1 July 21, 2014 CRAIN’S DETROIT BUSINESS Page 3 Field & Focus: Health care Stream to open Taking the pulse of health “If you want a systems, Page 11 candidate, you store have to move very Oakland Mall quickly.” Company index These companies have significant mention in this 1st state site week’s Crain’s Detroit Business: BY SHERRI WELCH Beaumont Health System . 12 Blue Care Network . 14 CRAIN’S DETROIT BUSINESS Botsford Health Care . 12 GLENN TRIEST Robin Ankton, regional vice president at Robert Half International in Southfield, says companies trying to recruit Michigan’s penchant for out- Cascade Partners . 6 candidates for hot industries like accounting need to move fast because candidates are scooped up quickly. door activities is bringing yet an- Crittenton Hospital and Medical Center . 11 other national outdoor sporting d.Diversified Services . 3 goods store to the state. Deloitte . 7 Field & Stream is coming to a for- Detroit Downtown Development Authority . 20, 26 mer Circuit City site at Oakland Detroit Economic Growth . 26 Mall in Troy and is expected to Detroit Pistons . 26 Numbers that count open in March. Detroit Red Wings . 20, 26 Field & Stream stores are owned Eastern Market . 4 by Pittsburgh-based Dick’s Sporting Field & Stream . 3 Goods (NYSE:DKS) and not affiliat- Garden City Hospital . 11 Demand for accountants brings rising salaries, signing bonuses ed with the magazine of the same Gibbs Planning Group . 29 name.