Here is the MiBiz Growth Report for Sept. 4, 2018.
Mergers & Acquisitions
- Kalamazoo-based Stryker Corp. (NYSE: SYK) signed a deal to pay $1.4 billion to acquire Leesburg, Va.-based K2M Group Holdings Inc. (Nasdaq: KTWO), a maker of spinal devices. Under the definitive agreement, Stryker will buy all outstanding shares of K2M for $27.50 per share. The acquisition, which is subject to regulatory review and approval by K2M shareholders, could close late in the fourth quarter. Founded in 2004, K2M Group expects 2018 sales of $288 million to $291 million with a net loss of $34.2 million to $38.2 million. The company lost $37.1 million in 2017. Citigroup Global Markets Inc. served as financial adviser to Stryker, which was represented by outside legal counsel at Skadden, Arps, Slate, Meagher & Flom LLP.
- Louis Padnos Iron and Metal Co. of Holland has acquired a “significant” ownership stake in GLR Advanced Recycling, a Roseville-based recycler of plastics, electronics, metals and other materials. What Padnos characterized as a joint venture was finalized in August. The deal will expand Padnos’ recycling capabilities to include various metals, motor vehicles, paper, plastic and electronics. Terms of the deal were not disclosed. Throughout Michigan and Indiana, Padnos has 18 locations, while GLR has six Michigan facilities. The two companies will continue operating under their current names, according to a statement. GLR expects to generate $85 million in revenue for 2018, up nearly 27 percent from last year, according to a report in Crain’s Detroit Business.
- Holland-based S2 Yachts Inc. plans to sell its Pursuit Boats brand to Loudon, Tenn.-based Malibu Boats Inc. (Nasdaq: MBUU) in a deal valued at $100 million. The Fort Pierce, Fla.-based Pursuit Boats makes a line of saltwater fishing boats that are powered by outboard motors. The premium boat brand, which was established 41 years ago, generated approximately $124 million in net sales in the 12-month period that ended June 30 of this year, according to a statement. The deal is expected to close in the fourth quarter of this year, subject to closing conditions. S2 Yachts, which is owned by the Slikkers family, retains ownership of its Tiara Yachts and Tiara Sport brands, according to CEO Tom Slikkers. Birmingham-based Angle Advisors LLC served as the financial adviser to S2 Yachts, which was also advised by Grand Rapids-based law firm Varnum LLP.
- Detroit-based private equity firm Huron Capital Partners LLC formed High Street Partners with insurance industry executives Scott Wick and Randy Koch to focus on deals in the insurance industry. High Street Partners plans to pursue a “buy and build” strategy and made its first deal with the acquisition of Peterson McGregor and Associates LLC, a Traverse City-based agency that provides commercial and personal insurance and employee benefits. High Street intends to make further acquisitions. Terms of the deal were not disclosed.
- Senior living providers Porter Hills in Grand Rapids and Chelsea-based United Methodist Retirement Communities plan to explore a merger. The combination would create a $150 million organization serving seniors in 22 counties across the Lower Peninsula. Porter Hills operates nine communities in West Michigan. Services include independent and assisted living, memory care, rehabilitation and skilled nursing, plus in-home services. United Methodist Retirement Communities consists of nine locations in Southeast Michigan. Due diligence on a potential merger should last at least through the rest of 2018.
- SpendMend LLC, a Grand Rapids-based provider of spending visibility and audit and recovery services to the health care industry, agreed to terms to acquire Contract Management Strategies of Los Angeles, Calif. CMS performs recovery audits and other professional services. Terms of the deal were undisclosed. Founded in 1993, SpendMend sold a majority stake in January to Chicago-based private equity firm Sheridan Capital Partners.
- Infinisource Inc., a provider of COBRA benefits and an administrator of consumer-directed health benefits, acquired Polestar Benefits, based in Lake Oswego, Ore. Polestar Benefits offers COBRA administration, plus flex spending accounts and health reimbursement arrangements.
- Grand Rapids-based Joymar Inc. has sold three of its car wash operations to Tucson, Ariz.-based Mister Car Wash, a growing national consolidator in the industry. The deal involved Joymar operations in Cascade, Jenison and Greenville. Terms of the transaction were not disclosed. With the Joymar acquisition, Mister Car Wash operates 15 locations in the broader Grand Rapids region. The transaction marks the fifth local acquisition for Mister Car Wash, which previously acquired Standale Auto Wash, Auto Spa Car Wash, Waterworks Car Wash LLC and Southland Auto Wash. Mister Car Wash, a trade name of Car Wash Partners Inc., operates 260 car washes spanning 21 states.
- Gainesville, Fla.-based CPA Mutual acquired Lansing-based Professional Management Consultants Association of America, a health care management consulting service for physicians, dentists, lawyers and accountants. The deal expands CPA Mutual’s brand awareness among CPA firms serving the health care industry, according to a report by Insurance Journal.
- Walker-based supercenter retailer Meijer Inc. last week opened the 37,000-square-foot Bridge Street Market in Grand Rapids’ West Side neighborhood. Meijer President and CEO Rick Keyes told MiBiz the company is bullish on opportunities with the new small-format concept, which it plans to take to other urban markets in its footprint. That includes Lansing, where Meijer plans to open the Capital City Market as part of a new mixed-use project planned by Gillespie Group, a Lansing-based real estate firm. The project is set to be built on about 4 acres in the 600 block of East Michigan Avenue at the southeastern corner with Larch Street.
- Auxo Investment Partners netted $50 million from family offices and institutional investors for its first fund. The Grand Rapids-based private equity firm expects to invest in 10 to 15 companies over the next three years and deploy an estimated $150 million in capital through co-investments with family offices. Formed in 2016, Auxo Investment Partners has already invested $30 million in deals for die manufacturers, plus a barge company in New Orleans, La. “We’ve established tremendous momentum since we launched — and we’re very proud to have strategically attracted value-added investment partners who share our vision of investing in companies for the long term,” said Jeff Helminski, managing partner of Auxo Investment Partners. Helminski founded the firm with Jack Kolodny and Fred Tedori.
- The Belle Michigan Impact Fund LP, a Grosse Pointe Farms-based venture capital fund created to support women-owned startups in Michigan, raised another $395,000 from investors, according to a recent filing with federal regulators. The fund, which targets a $20 million goal, has now raised $3.4 million through 36 individual investors.