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Sunday, 15 October 2017 22:22

Ott advised Chemical Financial on blockbuster deal for Talmer

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Jeff Ott of Warner Norcross & Judd LLP. Jeff Ott of Warner Norcross & Judd LLP. PHOTO: Katy Batdorff

MiBiz 2017 M+A Deals & Dealmakers Awards Finalist: Adviser

In his 28 years in practice, attorney Jeff Ott has worked on almost 70 transactions, nearly a dozen of which involved Chemical Financial Corp.’s acquisitions of other banks.

Valued at $1.61 billion, the 2016 deal for Talmer Bancorp Inc. was by far the largest acquisition for the Midland-based Chemical Financial. Ott, who has represented Chemical Financial for 25 years, oversaw and guided a team of attorneys at Warner Norcross & Judd LLP in Grand Rapids to provide legal counsel and bring together two publicly traded companies in a highly regulated industry.

“This deal was obviously larger in terms of size, so there were far more people involved in this transaction than I had involved in others,” said Ott, a partner at the Grand Rapids-based law firm who specializes in bank mergers and acquisitions. “It took more coordination. It wasn’t terribly unusual, (but) there were a lot of parts that all came together in just one deal.”

The work involved negotiating the final agreement, due diligence, a securities offering, regulatory review and approval, antitrust analysis, and the eventual divesting of a couple of former Talmer Bank branches in other states.

Jeff Ott

  • Company: Warner Norcross & Judd LLP

  • Workforce: 330 attorneys and staff in West Michigan

  • Brief business description: Full-service law firm with eight offices in Michigan, including Grand Rapids, Muskegon, Holland, Kalamazoo, Lansing, Midland, Southfield, and Macomb County

  • Best practices for effective dealmaking: “Listen to what your clients are looking for and the important points for them. In every deal, there are going to be different things that are critically important to the client, whether they are on the buy side or sell side. Those are the things that absolutely need to be addressed and that you fight for until the end,” Ott said. “It doesn’t make a lot of sense to argue over points that aren’t important to the client and that don’t make a difference in the transaction.”

  • Personal information: Spouse, Mary Ann Sabo

  • Academic degrees: Law degree from University of Michigan, and undergraduate degree from Albion College in economics and management

  • Community involvement: Habitat for Humanity of Kent County, board of directors, 2014-present; Albion College Board of Trustees, 2012-present; Equest Center for Therapeutic Riding, president 1999-2005, and board of directors, 1994-2014

The Chemical Financial-Talmer Bancorp deal closed Aug. 31 of last year, creating the largest bank headquartered in Michigan with total assets of $17.2 billion. 

For his role in helping to fashion the deal, Ott received recognition as a finalist in the 2017 MiBiz Dealmaker of the Year Awards in the adviser category.

The Talmer deal was the largest acquisition ever for Chemical Financial and “posed a fair amount of complexity,” according to William Collins, the corporation’s executive vice president and general counsel. 

“Jeff and the Warner team helped guide us through the myriad of securities, corporate, regulatory and business issues that had to be addressed,”  Collins wrote in an email to MiBiz. “The successful and timely completion of the Talmer/Chemical affiliation was a major accomplishment for our company, its shareholders, and the state of Michigan. Jeff was with us every step of the way.”

In his career, Ott has handled transactions across a variety of industries, including for banks, software and technology companies, power plants, and footwear and furniture markers.

The personal reward and satisfaction from the work comes from helping a young company make an acquisition that builds the business to a new level and allows the owner to pursue a vision, or from working with a long-time owner to sell his or her business after years of hard work.

“You’re helping people achieve goals in life,” Ott said. “On the sell side, you have people that created a very successful business and for one reason or another, they decide to sell. It’s a huge event for them and giving them the ability to realize a lifetime of work and be able to enjoy it is just fun.”

Whatever the industry the deal is in, Ott approaches each transaction by assembling a “great team of experts I can turn to on issues that pop up,” and always keeping issues critical to the client at the forefront.

“It’s paying attention to what is important to the client and being extremely responsive to the time constraints on the transaction, moving the transaction forward as quickly along as possible — those are the keys,” Ott said.

Aside from the Talmer transaction, Ott’s work for Chemical Financial included deals for Byron Center-based OAK Financial Corp. in 2010, Northwestern Bancorp Inc. in Traverse City in 2014, and Holland-based Lake Michigan Financial Corp. and Monarch Community Bancorp Inc. in Coldwater in 2015, as well as branch acquisitions from Independent Bank in 2012. 

Even with the Chemical Financial deals of the past few years, the market for M&A in the banking industry in Michigan has been “soft” of late, Ott said. Banks that either wanted to sell or needed to find a buyer have already done a deal, he said.

High regulatory compliance costs have been a driver in many bank deals across the U.S. over the last several years. As the industry hopes for regulatory relief under President Trump’s administration, banking M&A has tapered off, Ott said.

“You have another group of them out there that I think would be willing to look at a transaction, and probably the regulatory compliance costs would cause them to look at a merger-of-equals type of transaction where you’re getting two relatively similar-sized companies coming together to take advantage of cost savings,” Ott said. “But right now with the talk in Washington about easing up on the banking regulations and paying attention to some of the smaller banks, I think people are kind of holding back and have adopted (the position of) ‘let’s wait and see whether any of this actually comes to fruition.’

“At least in terms of banking, probably one of the things that would help make the market better is if there was some certainty at some point with respect to what they’re doing with regulatory requirements.”

In any industry, Ott advises clients to choose a partner carefully. Businesses must avoid transactions that later lead to regret and saying, “this may not be the best fit” or “this isn’t exactly what I thought.”

“A deal has to make sense,” he said. “Don’t do a deal just for the sake of doing a deal if the partner doesn’t make sense.”

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Mark Sanchez

Senior Writer

msanchez@mibiz.com

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