As the economy abruptly ground to a halt last spring under COVID-19 restrictions, Jeff Ott stayed busy.
Working from home, he was the main legal counsel for four bank transactions. A couple of the deals closed prior to the pandemic’s onset, while the legal work for others remained in progress and continued virtually amid the state-imposed restrictions.
“It was a very odd year, obviously, and the deal work dropped off. But I was fortunate to have a number of transactions that were in the works essentially right before the pandemic hit, so they played out over the course of the year,” said Ott, an M&A attorney and partner at the Grand Rapids office of Warner Norcross + Judd LLP who specializes in bank mergers.
“As the pandemic kind of came on, it was interesting how people were looking at the transactions and saying,‘Oh, gee: What do we do here?’” Ott said. “It was just very good monitoring and confidence on the merger partners that got them through, closed the deals, and that was great.”
Working with partner Charlie Goode, Ott led the legal teams that handled the transactions in the latter half of 2019 and into 2020, including two acquisitions by Sparta-based ChoiceOne Financial Services Inc. His work earned him an the 2021 MiBiz M&A Dealmaker of the Year Award as an adviser.
The deals in which Ott led the legal teams were:
• ChoiceOne’s $89 million acquisition of Lapeer-based County Bank Corp., the former parent company of Lakestone Bank & Trust, that was announced May 25, 2019, and closed Oct. 1, 2019. The two banks completed their integration in May 2020.
• ChoiceOne’s subsequent $20.8 million acquisition of Community Shores Bank Corp. in Muskegon that was publicly announced Jan. 6, 2020, and closed July 1. The banks completed their integration in mid-October.
• The $42 million acquisition of North Star Financial Holdings Inc., parent company of Main Street Bank in Bingham Farms, by Hancock-based Keweenaw Financial Corp., the parent company of Superior National Bank and Trust. Announced on Sept. 18. 2019, the deal closed Feb. 20, 2020 with integration in the second half of the year.
• $15 million debt offering in December 2020 by Sturgis Bancorp Inc., the parent company of Sturgis Bank & Trust, to support further growth across Southwestern Michigan.
Some of the transactions overlapped and — in the ChoiceOne deal with Community Shores — extended into the pandemic that added complexity to the deal, reinforcing the need for patience when putting together a transaction and to work through problems as they arise.
“It was different,” Ott said of 2020 and the pandemic-related challenges with keeping a transaction going through remote meetings and electronic means for exchanging documents.
“What I learned was when you’re dealing with things like the pandemic, you just have to be patient. You have to take each day as it comes and work through the deal with things that come up and move on to the next issue,” he said. “That’s fundamental with any transaction because you’re always going to get thrown a problem that you didn’t expect. … This one just happened to be a monster problem.”
The legal work included negotiating a transaction and preparing merger agreements and supporting documents, preparing securities registration statements and disclosure documents, due diligence and reviewing reports from management, coordinating and preparing regulatory applications, reviewing contracts, and reviewing communications to shareholders and public announcements on the deals.
Ott not only represented banks in the transactions but also public companies that had to pivot and hold their annual shareholders meetings virtually. That meant setting up electronic voting for shareholders to vote on proposals.
When working on a transaction, Ott said the best practice to follow is focusing on fashioning a deal that’s based on what a client needs to accomplish, rather than getting the best of the other side.
“I always approach the transaction not as a game or not trying to win negotiating points. I sit down with the client and figure out what their objectives are. There’s typically a couple of fairly significant business points that are important to your client, and it’s those things that you need to make sure fall on your side or as close to your side as possible,” he said. “At least from my perspective, being reasonable in the documents … creates a better deal atmosphere. It’s easier for the various parties to work together to address the points that need to be addressed for each side of a deal and get to the place where you want to be.”