Published in Economic Development

Growth Report: December 7, 2019

BY MIBIZ STAFF Saturday, December 07, 2019 09:07am

Here is the growth report for December 7, 2019.

M&A

  • Grand Rapids-based Service Express LLC has been sold to Harvest Partners LP, a New York City-based private equity firm. Service Express, a data center equipment maintenance service provider, had been a portfolio company of Charlotte, N.C.-based Pamlico Capital since July 2015. Service Express CEO Ron Alvesteffer and the management team will continue to lead the company and remain “significant owners of the business,” according to a statement. Terms of the deal were not disclosed. Rothschild & Co. and William Blair & Co. LLC served as financial advisers to Pamlico and Service Express, who were represented by Alston & Bird LLP. Harvest Partners was advised by Moelis & Co. and Harris Williams, and was represented by legal adviser Kirkland & Ellis LLP. Harvest Partners provided equity capital and arranged the debt financing for the transaction, as well as arranged equity co-investment capital.
  • Grand Haven-based JSJ Corp. sold portfolio company Dake Corp., a metalworking equipment and machine tool maker also based in Grand Haven, to Laguna Tools Inc. of Irvine, Calif. Terms of the deal, which closed Nov. 20, were not disclosed. Dake had been a part of JSJ Corp. for nearly 80 years. JSJ Corp. was advised on the deal by Grand Rapids-based Charter Capital Partners and the law firm of Miller, Johnson, Snell & Cummiskey PLC. Laguna Tools is a portfolio company of Rye Brook, N.Y.-based Hudson Ferry Capital, a private equity firm that invests in lower middle market companies.
  • Grand Rapids-based organic food delivery service Doorganics LLC has been acquired by venture capital-backed GrubMarket Inc. of San Francisco, Calif. The deal will allow Doorganics to use GrubMarket’s e-commerce network and supply chain as it works to expand its service offerings across the Midwest, according to a statement. Founder Mike Hughes and the leadership team will remain with Doorganics, which will keep its Grand Rapids headquarters. For GrubMarket, the acquisition of Doorganics provides “another key step” in the company’s national expansion plans, according to CEO Mike Xu, who called Doorganics “one of the premier farm-to-table grocery delivery services in the Midwest.” Terms of the deal were not disclosed. 
  • Traverse City-based accounting firm Dennis, Gartland & Niergarth PC acquired Hill, Schroderus & Co. LLP, an accounting firm based in Petoskey, according to a statement. All staff members at Hill, Schroderus & Co. transitioned to work for the new firm, which is maintaining the Petoskey office. With more than 60 staff members, Dennis, Gartland & Niergarth is now one of the largest CPA firms in Northern Michigan.
  • Grand Rapids-based investor relations and public relations firm Lambert & Co. has expanded into the Southwest U.S. with the hiring and acquisition of a team of professionals based in Phoenix, Ariz. The deal gives Lambert & Co. its second office outside of Michigan. The firm opened an office in New York City in 2018 and also has offices in Detroit and Lansing. In Phoenix, 30-year public relations veteran Michelle Olson brings to the firm a roster of clients in the automotive, mobility and real estate industries. The Phoenix office will function as a platform for Lambert & Co. to serve markets on the West Coast.

Expansion

  • Kentwood-based Wise Men Distillery LLC is planning a downtown Grand Rapids tasting room inside McKay Tower at 146 Monroe Center St. NW. Tom Borisch, one of the owners and founders of Wise Men Distillery, said his fellow owners started the company with the goal of offering an intimate tasting room to serve high-end craft cocktails. The new location would offer about 700 square feet for the bar. The distillery opened at 4717 Broadmoor Ave. SE over the summer. The partners are working on a quick buildout of the new location, and are hoping to open in the first quarter of 2020. Wise Men Distillery currently offers white whiskey, rum, moonshine and gin, and will release its first bourbon later this year.

Real estate

  • An affiliate of Bloomfield Hills-based Agree Realty Corp. (NYSE: ADC) purchased a 110,380-square-foot Home Depot store facility at 2727 Alpine Ave. NE in Walker for more than $22.5 million, according to city property records. The seller in the deal that closed on Nov. 14 was Knudson Walker LLC, which originally purchased the facility in 2006 for more than $19.3 million. The facility was built in 1996. Agree Realty (NYSE: ADC) is a self-managed REIT focused on the development and acquisition of net lease retail properties throughout the U.S. Its portfolio consists of 789 assets in 46 states, containing about 14 million square feet of gross leasable space. 
  • Wisconsin-based Commonwealth Development Corp. broke ground on Edge Flats, a new affordable housing development on Seward Avenue between California and Veto streets on Grand Rapids’ northwest side. The $9 million, 34-unit building was awarded $812,627 in low-income housing tax credits from the Michigan State Housing Development Authority in the October 2018 funding round. The project will serve people earning 30-80 percent of the area median income. It will feature 14 one-bedroom and 22 two-bedroom units. The affiliated Commonwealth Construction Corp. will serve as the construction manager on the project, which will be managed by Commonwealth Management. Wisconsin-based Excel Engineering Inc. is the architect. Commonwealth aims to complete the project and begin leasing in October 2020.

Health insurance

  • The merger between Grand Rapids-based Priority Health and Detroit-based HMO Total Health Care Inc. will head to a close in the new year after receiving state regulatory approval. In late November, Priority said that the Michigan Department of Insurance and Financial Services (DIFS) had signed off on the deal. The regulatory approval follows prior backing from Total Health Care members who overwhelmingly backed the merger. Both companies will continue to operate independently and maintain separate brands after the deal closes. Total Health Care will concentrate on providing health plans in Detroit and surrounding communities. Priority Health and Total Health Care also plan to create a $25 million foundation aimed at improving health in the Detroit area.

Higher ed

  • Business leaders and philanthropists gave $6.5 million to Western Michigan University for the Center for Principled Leadership and Business Strategy. The new center led by two faculty members at WMU’s Haworth College of Business will provide undergraduate and graduate students with business mentors, large-scale consulting projects and an investment fund for the acquisition of small business startups by MBA students. Seed money for the Center for Principled Leadership and Business Strategy comes from Haworth Inc. Chairman Emeritus Dick Haworth, Greenleaf Trust Chairman William Johnston, the Menard family behind the Eau Claire, Wis.-based Menard Inc. home improvement retail chain, and the Charles Koch Foundation.

Retail

  • Michigan retailers report they had sluggish sales in October, the result of a slowing economy and other factors such as the six-week strike against General Motors. Results from a monthly survey by the Michigan Retailers Association also indicate that members expect a “slightly slower” holiday shopping season, although “sales will still be robust compared to earlier in the decade.” The association’s monthly retail index registered 43.0 for October, up slightly from 42.7 in September and well off the reading of 62.9 in October 2018, according to results from the monthly survey conducted with the Detroit branch of the Federal Reserve Bank of Chicago.
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