Winner | Dealmaker: Adviser
Michael Jones, Partner, Warner Norcross & Judd LLP
- Personal info: Wife, Cara; daughter, Claire; and son, Garrett
- Academic degrees: B.A., University of Michigan, 2001; J.D., Wayne State University, 2004
- Community involvement: East Grand Rapids Library Board of Directors, 2009-2012. Member of the State Bar of Michigan and Grand Rapids Bar Association.
In what he describes as a “good year,” Michael Jones was involved in closing 20 transactions in late 2015 and the first half of 2016 that had a collective value of $1.5 billion.
A law partner and co-chair of the M&A practice group at Grand Rapids-based Warner Norcross & Judd LLP, Jones is presently working on another 11 deals for clients.
Among the deals he advised on was the $532 million acquisition of Checkpoint Systems Inc. by Toronto-based CCL Industries Inc., a specialty labeling and packaging company. Jones led a team of Warner attorneys that represented CCL Industries.
He also handled deals involving Consumers Energy Co.’s $155 million acquisition last December of a gas-fired power plant from an affiliate of JPMorgan Chase & Co.; the August sale of Perrigo Co. plc’s vitamin, minerals and supplements business; product line purchases and a divestiture by Portage-based Stryker Corp.; and Haworth Inc.-owned Poltrona Frau Group’s April acquisition of a majority stake in Los Angeles-based JANUS et Cie., a producer of luxury outdoor furniture.
Those deals were among the achievements that won Jones recognition in the adviser category of the 2016 MiBiz M&A Deals and Dealmakers of the Year Awards.
“It has been a good year for M&A so far. I think the typical things are making dealmaking conducive. Interest rates are low and the debt markets are still favorable,” Jones said. “I think that the rest of the year and the beginning of next year will continue to be strong. There is a lot of dry powder with private equity that needs to be deployed.”
Jones takes pride in making partner in 2012 at Warner Norcross & Judd, where he started in 2004 after earning his law degree from Wayne State University. He credits fellow law partners Steve Waterbury and Greg Schmidt with providing mentorship and giving him plenty of responsibility early in his career.
About three-quarters of Jones’ practice has involved representing buyers. In an M&A market that continues to be in good shape, the biggest challenge for buyers remains finding quality acquisition targets for the right price. The market right now has more buyers than sellers, keeping multiples high.
“A major challenge has been finding and then winning deals. There are more buyers than sellers right now. Even when a good opportunity is found, it is usually in a competitive process, so the chances of actually getting the deal are reduced,” he said. “I have talked to lots of companies that want to do deals but are having a hard time finding them at the right price. Multiples and valuations are still high right now, so buyers need to be disciplined and make sure they don’t pay too much.”
In any transaction he’s involved with, Jones works to be “extremely responsive,” available at all times and able to produce and revise documents quickly. Paying close attention to what both parties need in a transaction “allows you to come up with creative solutions and compromises for the issues that will inevitably arise.”
When representing sellers, Jones advises them to prepare for an extensive due-diligence process that most buyers will likely require. He’ll provide clients a sample due-diligence request list early in the process “so they can begin to gather the relevant documents and we can access and address any problems early on.”
“A lot of times the seller is shocked at how cumbersome the due diligence requests can be, so it is good to have lots of time in advance so management isn’t distracted on gathering documents in the midst of the deal when they should be focused on the deal and running the business,” Jones said.
On the other side of a transaction, he reminds buyers to stay disciplined to avoid overpaying for a company, as well as to focus on post-deal integration. Many deals fail to meet the expected rate of return for a buyer because they did not focus enough on integration, he said.
Jones also cautions clients to avoid getting too far down the road on a potential transaction before hiring professional advisers. He’s had times when a client signed a letter of intent (LOI) before getting professional advice and later learned the deal could have been structured better.
“Although the LOI is typically not binding, after agreeing to something in an LOI, it is difficult to change down the road,” said Jones, who cites examples where buyers allowed the seller to draft the first purchase agreement.
A buyer customarily drafts the first proposal, unless the sale involves an auction. Allowing the seller to draft it “puts the buyer at a disadvantage right off the bat and it is usually more costly to mark up a seller draft than doing the first draft,” Jones said.