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ALSO IN THIS ISSUE:
WHAT IS YOUR BUSINESS WORTH? RAJENDRA SHARES A.O. SMITH STRATEGY AT M&A FORUM AN INTERESTING TIME TO TALK TRADE Serial entrepreneur Kelly Fitzsimmons of Custom Reality Services
inside
April 17 - 30, 2017 HIGHLIGHT S Social Media Strategies
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No, seriously … delete your account.
Political Beat
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Cullen says he won’t run for governor.
Made in Milwaukee
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Wigwam Mills’ Sheboygan-made socks a constant in changing retail world.
The Good Life
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George Radtke and Liesl Thomas preserve their heritage.
Getting There
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Eduardo Diaz of InBounds Training Center.
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S TR ATE GIE S
S P E C I A L R E P O R T:
M & A : BIG DE A L S
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In addition to the cover story, coverage includes tips for driving a higher company valuation and a recap of information shared at the 2017 BizTimes M&A Forum.
COV E R S T ORY
S P E C I A L R E P O R T:
BIZ CONNECTIONS
Built to sell
INTE R N ATION A L TR A DE
Stories of successful exits
A preview of the Wisconsin International Trade Conference, which will be hosted by the Metropolitan Milwaukee Association of Commerce’s World Trade Association on Thursday, May 11, at the Wisconsin Center in downtown Milwaukee.
ON THE COVER: Serial entrepreneur Kelly Fitzsimmons of Custom Reality Services. — photo by Erich Schroeder Photography
Generation Y Aleta Norris 46 Negotiation Cary Silverstein 47 Management John Howman 48
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Biz Notes 49 Personnel File 50 Commentary 52 BizTimes Around Town 53 The Last Word 54
V I S I T B I Z T I M E S . C O M F O R A D D I T I O N A L S T O R I E S , D A I LY U P D AT E S & E - N E W S L E T T E R S Editorial . . . . . . . . . . . . 414-336-7120 Advertising . . . . . . . . . 414-336-7112 Subscriptions . . . . . . . 414-277-8181 Reprints . . . . . . . . . . . . 414-277-8181
Founded in 1995, BizTimes Milwaukee provides news and operational insights for CEOs, presidents, owners and other top level executives at companies in southeastern Wisconsin (Milwaukee, Waukesha, Ozaukee, Washington, Racine, Kenosha, Walworth and Sheboygan counties). Subscription Customer Service: BizTimes Milwaukee, 126 N. Jefferson St., Suite 403, Milwaukee, WI 53202-6120, USA, Phone (414) 277-8181, Fax (414) 277-8191, circulation@biztimes.com, www.biztimes.com
BizTimes Milwaukee (ISSN 1095-936X & USPS # 017813) Volume 23, Number 2, April 17 - 30, 2017. BizTimes Milwaukee is published bi-weekly, except two consecutive weeks in December (the second and third weeks of December) by BizTimes Media LLC at 126 N. Jefferson St., Suite 403, Milwaukee, WI 53202-6120, USA. Basic annual subscription rate is $42.00. Single copy price is $3.25. Back issues are $5.00 each. Periodicals postage paid at Milwaukee, WI and additional mailing offices. POSTMASTER: Send all UAA to CFS. NON-POSTAL AND MILITARY FACILITIES: send address corrections to BizTimes Milwaukee, 126 N. Jefferson St., Suite 403, Milwaukee, WI 53202-6120. Entire contents copyright 2017 by BizTimes Media LLC. All rights reserved.
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rainerd, Minnesota-based retailer Mills Fleet Farm plans to build two new stores along I-94, at the Pabst Farms development in Oconomowoc and in Kenosha. In Kenosha, Fleet Farm plans to build a 218,600-square-foot location east of I-94 and north of 60th Street. The site is near the former Dairyland Greyhound Park dog track. If both the Oconomowoc and Kenosha stores are approved and built, they would be Mills Fleet Farm’s 18th and 19th locations in Wisconsin. Other locations include Germantown and West Bend. In Oconomowoc, Mills Fleet Farm plans to build a 218,628-square-foot store at I-94 and Highway 67, according to plans submitted to the city, and hopes to begin construction in June. The proposed plans include the main store building, a covered outdoor materials yard and a 4,900-square-foot convenience store with three car wash bays and a gas station located on a 19-acre site. The parking lot would have spaces for 652 cars. The project would be the first devel-
opment at the Town Centre portion of Pabst Farms. A decade ago, developer Peter Bell’s 1,500-acre Pabst Farms development included plans for a 1 millionsquare-foot upscale regional shopping center, called the Pabst Farms Town Centre, northeast of I-94 and Highway 67. Several other components of the overall Pabst Farms development plan came together, including, Eastlake Village, a 170 single-family home development built by Pabst Farms Development; two hotels; a 1 million-square-foot Roundy’s distribution center; and a neighborhood shopping center anchored by a Pick ’n Save grocery store. But plans for the upscale regional mall never moved forward and most of the other commercial development at Pabst Farms ceased during and after the Great Recession. Plans for Walmart and Sam’s Club stores were announced for the Pabst Farms Town Centre in 2013, but the developer later backed away from those plans. In July, Pewaukee-based Neumann Companies Inc. announced plans to develop 351 single-family home lots at
COURTESY STEPHEN PERRY SMITH ARCHITECTS
Mills Fleet Farm plans stores in Oconomowoc, Kenosha
A rendering of the Mills Fleet Farm store planned in Oconomowoc.
Pabst Farms, creating four new neighborhoods along I-94 in Oconomowoc and Summit. At the time, William Niemann, executive vice president for Pabst Farms Development, said he believed the residential development could finally spark more commercial development on the project. Now, Niemann said he believes Mills Fleet Farm would be a wonderful anchor to the Town Centre portion of Pabst Farms and could lead to additional re-
tailers and entertainment venues. “I’m very enthused about this,” Niemann said. “I think this is a retailer that will appeal to residents.” Mills Fleet Farm stores sell sporting goods, lawn and garden products, agricultural supplies, hardware, clothing and general merchandise. In February 2016, New York-based investment firm KKR acquired Mills Fleet Farm.
——Corrinne Hess
SOCI AL M E D I A S T R AT E GI ES
No, seriously … delete your account One of the best parts of being a reporter is I am constantly learning. I learn new things every day about companies, industries and ideas, and with thousands of manufacturers in the state and region, there is no way I can know them all. So when a company makes news by announcing an expansion, relocation or innovative product, one of my first stops is often the company’s website and social media pages. Many companies do a great job of connecting with their customers through sites like Twitter, LinkedIn and Facebook. The problem comes when those accounts don’t receive the attention they require. Maybe an intern or someone on your staff set up accounts on every conceivable platform a few years ago, only to have the accounts languish when the novelty wore off and the daily pressures of work kicked in. Whatever the case, I’ve come across plenty 4
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of companies with what are now essentially defunct social media pages. Twitter accounts that haven’t seen a new tweet since 2014, Facebook pages that feature a holiday cover photo from two years ago, or LinkedIn pages with outdated company details. What makes it worse is many company websites continue to link to these accounts. There are probably worse things you could do to your brand. As a reporter, it’s easy enough for me to look beyond these accounts to find the information I’m looking for, and I’m sure your customers care more about the quality of your product or service than they do about when you last tweeted.
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But leaving those accounts out there likely isn’t doing you any favors. Either take the time to continually manage your social media or do yourself a favor and delete your accounts.
——Arthur Thomas covers manufacturing and other industries at BizTimes Milwaukee.
leading edge COFF E E B R E A K
POLITIC AL BEAT
Cullen says he won’t run for governor BY WISPOLITICS.COM
What was the smartest thing your company did in the past year? “We were honest with ourselves after taking a strategic look into our future. We came to the realization that our 113-year-old organization wasn’t reacting to the wants and needs of people with developmental disabilities. Market conditions started changing 15 years ago and we hadn’t begun to react. Over the past two years, we have been incredibly (and painfully) honest. We now have an honest strategic plan supported by an honest budget to position us for the future in the real world that we operate in.”
What’s new at your company? “As we position ourselves for the future, we will build upon our longstanding history and our culture of compassion. We continue our beautiful mission of taking care of people with intellectual and developmental disabilities, but we’re operationally and tactically enhancing our way of serving every day. We also know that to compete in the future, nothing short of a total transformation of how we are doing things is needed – from finance to marketing to operations to project management. Nearly every rock has been turned over in the past two years, and I like rock carriers – people who challenge the status quo. I’m confident Bethesda will look a lot different in the future than it does today.”
From a business standpoint, who do you look up to? “I look up to my colleagues at Bethesda; from our staff, who provide direct care, to the execu-
tives in the organization. They amaze me more and more every day. I can’t say strongly enough how proud and blessed I am to serve with such awesome people. I love this team. “Outside of Bethesda, I look to my previous experiences in the military, where I served the nation for over two decades. The generals I worked for over the years showed me their exemplar methods of leadership and effectiveness. I couldn’t have asked for a better professional upbringing than serving the nation under the great leaders I worked for – whether it was at the Air Force Academy when I was a cadet or at the Pentagon, on the Air Staff. I had the opportunity to watch and to learn from people who exhibited traits of selflessness and courage; true patriots.”
What do you like to do in your free time?
“I own a 19th century Victorian home which I’m continuously restoring! I enjoy playing the role of handyman on the weekends when it comes to painting, plumbing, construction and flooring. I come from a family line of house painters and wallpaper hangers — it’s definitely in my DNA. I am comfortable working a paintbrush as much as I am with working a cost-benefit analysis. Over the years, I’ve found that framing a wall, running electrical and putting up drywall is very analogous to Mike Thirtle reframing and President and CEO building an organizaBethesda 600 Hoffmann Drive, Watertown tion; one has to start bethesdalutherancommunities.org with a blueprint Industry: Health care (vision) to create the Employees: 3,800 final product.” Family: Four children: Natalie, Jack, Dan and Madelyn. w w w.biztimes.com
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Former Democratic state Sen. Tim Cullen announced he will not run for governor in 2018, saying the chase for contributions to fuel a bid would be “demeaning.” Cullen, of Janesville, opened a bank account in March to begin accepting donations and registered with the state to run. He then started calling friends for donation pledges. Cullen said while he found support in those calls, the amount pledged wasn’t always as high as he would have liked. He also was told he would need to spend four hours a day calling potential donors, including strangers. “I didn’t enjoy doing it with my friends,” Cullen said. “I can’t imagine what it would be like to do it with complete strangers.” Cullen’s decision leaves 25-year-old Bob Harlow, a Wisconsin native who ran unsuccessfully for Congress in California last year, as the only Democrat who has formally announced an intention to run next year. Cullen said he has met with businessman Andy Gronik, Jefferson County District Attorney Susan Happ, Dane County Executive Joe Parisi and state Rep. Dana Wachs about possible runs. He also noted he served in the Senate with state Sen. Kathleen Vinehout (D-Alma) and was Senate majority leader while Milwaukee attorney Matt Flynn was state Democratic Party chair. Both have indicated an interest in running next year, and Madison businessman Mark Bakken also has been mentioned as a possible candidate. Cullen noted that Mary Burke raised $17 million for her challenge of Gov. Scott Walker in 2014, $4.6 million of that her own money. Walker, meanwhile, raised $34.4 million. Cullen said even if he could have raised $12 million for a bid, he suspects Walker will top $40 million for the 2018 race, meaning the former lawmaker would have been outspent better than 3-to-1. Wispolitics.com is a media partner of BizTimes Milwaukee.
BY TH E NU MBERS
55.5 million
$
Aurora Health Care will build a $55.5 million ambulatory surgery center and medical office building at the 84South development in Greenfield.
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M&A Forum BizTimes Media will host the 2017 M&A Forum on Friday, April 21, from 7:30 to 11 a.m. at Milwaukee Marriott Downtown, 625 N. Milwaukee St., Milwaukee. The annual event examines different business exit strategies, including recapitalizations, employee stock ownership plans, management buyouts, sales to private equity firms, mergers with strategic partners and more. Cost is $45. For more information or to register, visit biztimes.com/maforum. Wigwam Mills has 330 knitting machines and has developed a four-year apprenticeship program to train people on how to maintain them. For a complete listing of all area events, visit the event section of our website.
Wigwam Mills’ Sheboygan-made socks a constant in changing retail world To say today’s retail environment is evolving might be an understatement. Longtime brick-and-mortar stores are going out of business, new online retailers are entering the scene and consumer tastes are changing constantly. Manufacturers supplying those retailers are feeling the effects of those changes right alongside their retail customers, producing in smaller quantities with more flexibility and responsiveness. “It’s having the foresight and being enough of a risk-taker to try to predict
ARTHUR THOMAS (414) 336-7123 | Twitter: @arthur8823 arthur.thomas@biztimes.com
where it’s going, versus where it’s been,” said Tom Wheeler, president and chief executive officer of Sheboyganbased sock maker Wigwam Mills Inc. As a 112-year-old company, Wigwam has had its share of hits and misses, but Wheeler said the ability to adjust and adapt has kept the company around. “It is an incredible story of tenacity and commitment and incredible stewardship by the Chesebro family,” said Wheeler, who is just the second person outside the founding family to lead the company. He’s found customers have fond memories of the Wigwam brand and “a warm, kind of romantic relationship with this company.” Even without the company history, a manufacturer making socks in Sheboygan and not overseas makes for
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Wigwam Mills Inc. 3402 Crocker Ave., Sheboygan Industry: Sock manufacturing Employees: 250 www.wigwam.com
‘Work Pause Thrive: How to Pause for Parenthood Without Killing Your Career’
an intriguing story – although Chris Chesebro, Wigwam director of operations, pointed out the process for knitting socks lends itself to more automated, domestic production than other garments would. Wigwam has 330 knitting machines in its 200,000-square-foot facility just off I-43. The company has established its own four-year, state-certified apprenticeship program to develop the mechanics needed to keep the machines running. Each machine can produce a sock every two to four minutes, depending on complexity. Some of the company’s newer machines handle upward of 20 different yarns for a single sock, allowing for unique designs and different technical properties. But having the capability isn’t enough. Wigwam has to figure out the right designs and styles to produce, generally working a season or more ahead. “We need to be customer-centric and we need to be marketing driven,” Wheeler said. Wigwam now finds itself pushing into new environments, facing a major test in college bookstores this fall and marketing through new social media channels rather than in print to attract a new generation. At other times, Wigwam can rely on its American-made heritage to help sell the product. “We have a lot of hunters and fisherman and sportsmen that really respect the fact that we still make our products in the U.S.,” Wheeler said. “It’s a big driving point for them.”
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After the birth of her second child, marketing and advertising executive Lisen Stromberg left the career she was in to stay home with her children. After taking a brief pause, she pivoted to become a journalist, writing about women, work and life in Silicon Valley. Her work connected Stomberg to many highly successful women who shared stories about their own temporary pauses or downshifts in careers and how they had to reconcile family life with work life. In “Work Pause Thrive,” Stomberg shares how these women incorporated pauses into their careers to embrace all aspects of their lives. She looks at social science research and data collected from nearly 1,500 women and 186 first-person interviews to provide a blueprint for stepping back from a career without sacrificing ambitions. Stromberg finds that there is a way for both women and men to lead the lives they want where they can build both a career and a family. “Work Pause Thrive” is available at 800ceoread. com for $19.96.
leading edge NON P RO F IT N E W S
THE GOOD LIFE
Wisconsin Veterans Network separates from MHVI The Wisconsin Veterans Network will operate independently from Milwaukee Homeless Veterans Initiative, its founding nonprofit organization, the two groups announced. The split, occurring about a year after MHVI created VetsNet, allows each organization to have separate boards of directors. VetsNet will first invite local veterans to sit on its new board of directors, which will be announced in the near future. Founded in 2008, MHVI directly assists homeless veterans and their families in receiving benefits, housing, health care, clothing, food and other needs. VetsNet connects veterans with 22 local organizations that provide various services. Both tax-exempt entities are founded and run by veterans. The separate leadership will help both entities focus on their individual missions and expand community relationships. VetsNet and MHVI will continue to operate out of their Greenfield Avenue location in West Allis but VetsNet plans to redevelop its website and create a Facebook page.
——Maredithe Meyer
George Radtke, far right, and Liesl Thomas, second from right, play with Pommersche Tanzdeel Freistadt at Milwaukee’s German Fest.
Preserving their heritage What started as a way to make their German friends and relatives feel welcome during the American Bicentennial celebration in 1976 has become a way of life for more than 40 years for siblings George Radtke and Liesl Thomas. Radtke and Thomas, co-owners of W. & E. Radtke Inc., a wholesale perennial nursery in Germantown, attended Trinity Lutheran School in the Freistadt neighborhood of Mequon, where Germans from the country’s Pomerania region settled in the mid-1800s. Freistadt hosted a Pomeranian dance group from Erlangen, Germany in 1976. A year later, Pommersche Tanzdeel Freistadt Inc., a performing music and dance troupe, was organized to preserve the community’s culture.
George Radtke, middle, and Liesl Thomas, right, with Carol Bandow. Thomas, who was 14 at the time, learned to play the accordion. Radtke, who was 16, began singing with the group. Today, there are about 60 members, some as young as 5, who perform 20 to 25 times per year at ethnic festivals and folk fairs locally and across the Midwest. “This has been a great release,” Radtke said. “It is a time to clear your mind, relax and not be worried about what is going on around you.”
——Corrinne Hess
“Our partnership with Aurora helps keep our team members engaged in their own health and wellness.” Jeff Stieg, Senior Health & Wellness Specialist Goodwill Industries of North Central WI
Aurora Health Care helps businesses build healthier and happier workplaces. We offer more access to exceptional care including more locations closer to home, more care options and world-class doctors, all at a cost that fits your bottom line. To hear the rest of Goodwill’s story and to learn how Aurora can help your company, visit aurora.org/WorkWell
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InSinkErator St. Louis-based Emerson Electric Co. has completed the purchase of 11.6 acres of land in Mount Pleasant for the future headquarters of InSinkErator. The $24 million, 85,000-square-foot facility will be built at the southwest corner of Highway 20 and International Drive. Emerson Electric paid $2.7 million for the land.
——Corrinne Hess
G ET T I NG TH E R E
Eduardo Diaz InBounds Training Center 2920 W. Vera Road, Glendale Age: 21 Education: Bachelor’s in international business and certificate in inter-America studies from Cardinal Stritch University Current position: Marketing director Previous position: Head coach at America SCORES Milwaukee
cation is just genuine and it’s the most effective way to get to know someone. That’s how I get to know people, that’s how I got my internships, that’s how I got my job.”
What is your next career step that will help you toward your ultimate goal?
How has networking helped propel you on your career path? “It’s been everything to me, because especially with the marketing, you get to do a lot of fliers and emails and promotions out there, but I feel like face-to-face communi-
“A lot of the players which I’m working with play with the Milwaukee Wave. Guilherme Veiga, he plays for the Milwaukee Wave and he also works for the InBounds Training Center. I want to work for a professional soccer team, but I know it takes a lot of hard work. I’ve always tried to be involved within the soccer community.”
THURSDAY, MAY 11, 2017 Trade in Times of Change
The Governor’s Export Awards presented by GOV. SCOTT WALKER
Panel Discussion with Award Winners moderated by LT. GOV REBECCA KLEEFISCH
Attend 6 expert-driven breakout sessions
Keynote speaker: JOHN MURPHY International Policy VP, U.S. Chamber of Commerce
Learn from local & national thought leaders and your peers
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ON LIN E POLL
Re: Manufacturing Extension Partnership spending cut “There’s nothing wrong with ambitious goals. However, there’s plenty wrong when those goals come into direct conflict with policies and actions that seem destined to produce the opposite result. Such is the case with Trump’s plan to zero out federal support for the Manufacturing Extension Partnership program within the National Institute of Standards and Technology. The program has helped manufacturers improve productivity and add jobs since the late 1980s.” — Tom Still, Wisconsin Technology Council
Re: President Trump and health care “It is abundantly clear that our president knows very little about the delivery of health care in America…He was effective in real estate deals because he knew that market space. Absent such knowledge in health care and the art of governance in a democracy, he blew it when he tried to cajole and bully GOP congressmen.” — John Torinus, Serigraph Inc.
Re: Federal spending on scientific research
A 140,000-square-foot Von Maur store recently opened at The Corners of Brookfield, a new shopping center in the Town of Brookfield.
“If you want a more secure America, policymakers have agreed for decades, the government must invest enough to stay ahead of competing nations that would like nothing better than to close the historic research and innovation gap. Trump’s discretionary spending budget moves in the opposite direction.” — Tom Still, Wisconsin Technology Council
Will Republicans in Congress reach agreement to pass a significant tax reform bill?
Yes: No:
48% 52%
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innovations Corncob looks to turn wastewater into growth
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ouglas Hwang has been working on water filtration issues for three decades and he believes the latest product from Waukesha-based startup Corncob Inc. could solve many of the industry’s challenges. ARTHUR THOMAS (414) 336-7123 arthur.thomas@biztimes.com Twitter: @arthur8823
The Corncob II, which uses a membrane technology, can filter many different types of water into potable drinking water in a single step. It can use the concentrated materials removed from water as fuel, limiting the amount of energy
needed and potentially taking a wastewater treatment plant off the grid. “I think we have the answer now,” said Hwang, Corncob president and coinventor. Corncob recently held a product demonstration at the Milwaukee Metropolitan Sewerage District facilities along with The Water Council as part of Milwaukee Water Week. Water from the Menomonee River was pumped into Alfie, the nickname for Corncob’s pilot model, and after passing through spinning membrane discs, came out as drinkable water. Corncob was one of six startups chosen to participate in the fourth year of The Water Council’s BREW Accelerator program. The company received a $50,000 equity in-
Corncob Inc. Waukesha Innovation: Dynamic membrane water filtration www.corncobinc.com
vestment, space in the Global Water Center and business training and mentorship. “It’s difficult to find any area of the world, let alone here in the U.S., that doesn’t suffer the impacts of water quality or quantity (issues),” said Karen Frost, vice president of business development for The Water Council. There are a number of potential applications for Corncob’s product.
Douglas Hwang holds up a model to show the membrane system’s resemblance to a corncob.
The company has quoted a 40-foot-long version of the device for converting raw sewage to potable water for an application in Egypt. A delegation from China National
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EXECUTIVE VIEWPOINT BREAKFAST & CONVERSATION WITH TED BALISTRERI Family Co-owner, Sendik’s Food Markets
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Rwanda, Scotland, Ma London, Greenland, Finland, France, Ugan Washington, Switzerlan
Wisconsin Club - Country Club 6200 W. Good Hope Rd. - Milwaukee $49/Member • $69/Non-member • $345/Table
Corncob Inc. brought its Alfie pilot model to the MMSD facility for Milwaukee Water Week.
Petroleum Corp. attended the product demonstration and is considering Corncob as a way to treat and reuse fracking water. A mobile version can go on sewer vacuum trucks that use thousands of gallons of water per day to move sludge toward the vacuum. The mobile Corncob unit could eliminate the need to use freshwater in that application. Hwang said the Corncob membrane can be customized from microfiltration down to the reverse osmosis level. “It’s a different degree of filtration that we customize for projects to achieve drinking or irrigation or just river discharge, so it’s flexible,” he said. Hwang has big visions for what Corncob could become, suggesting it could generate $100 million a year in sales with full production. Manufacturing partners have been lined up in Green Bay, Brookfield and New Berlin, and Hwang said he’s committed to creating jobs and contributing to the economy. “We are hoping to develop this technology here. This is the right place to do it and it is the right time,” he said. But there are challenges to overcome before Corncob can grow to those levels. For starters, Hwang and his team need to figure out how to scale the product into a larger model. The membrane discs spin in a pressurized housing and while the pilot model can handle around 5,000 gallons per day, plans call for a version that handles 500,000 gallons per day.
Rwanda, Scotland, Maine, London, Greenland, Finland, France, Uganda, Washington, Switzerland, Las Vegas, Italy, Israel, Guam, Chad, Rwanda,
“There are challenges … when we blow this vessel up that big,” Hwang said. The company also is still searching for its first installation of the Corncob II unit. The Alfie unit has been traveling to differRwanda, Scotland, Maine, London, ent sites and has been tested with 15 different kinds of water, including activated France, Uganda, Greenland, Finland, sludge from a wastewater treatment plant, Washington, Switzerland, Las Vegas, leachate from a landfill and lye water from a food processing plant. Italy, Israel, Guam, Chad, Rwanda, “It’s very consistent,” Hwang said. “To be honest with you, it’s just a membrane 2017 Media Partner: 2017 Sponsors: that’s doing the job, so concept-wise it’s very simple, but commercial-wise we are in search of our first installation.” The water that comes out of Corncob Brought to you by MMAC and its Council of Small Business Executives (COSBE) can be drinkable as is and depending on the source, should taste just fine. Hwang said this is especially true for a source like river water. “Sewage? When we are processing sewage, yeah, there is a scent to it,” he said. “Scientifically, it’s drinkable if you go through the tests the EPA requires, but it Junior Achievement does have a scent to it and when it comes PHONE: (414) 577-3800 to that, we probably will put it through acWEB: wisconsin.ja.org tivated carbon to just make it taste better.” Junior Achievement prepares young people to successfully Hwang also was asked at the demonnavigate their economic future. Through learning stration where the company name origiexperiences that simulate future success and support career discovery, JA programs provide students with the nated. He reached for a miniature model financial literacy, entrepreneurship and work-readiness of the unit, demonstrating how the memskills that they will need to become responsible citizens and succeed in a global economy. brane filter could be pulled out and replaced. Then he paused and held up just To learn more, visit biztimes.com/giving the membrane portion. FEATURED NONPROFIT “Raise your hand if you see a corncob,” PRODUCED BY he said. n
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real estate
Harbor District unveiling plans for new parks, riverwalk
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ore public space, amenities and access to the waterfront. Those are the suggestions members of Harbor District Inc. have been hearing for the past year from community members interested in the neglected CORRINNE HESS P: (414) 336-7116 E: corri.hess@biztimes.com Twitter: @CorriHess
970-acre area located just south of Milwaukee’s Historic Third Ward. The nonprofit group was formed by the City of Milwaukee about two years ago to try to tackle what should be done 12
with the area, which has about nine miles of waterfront. On April 25 and 27, Harbor District Inc. will host two water and land use planning meetings to unveil its proposals, and also seek additional feedback. “We get a lot of suggestions, but one thing is loud and clear: people want public space, public amenities and access to the waterfront that has been off limits to them for 100 years,” said Dan Adams, planning director for Harbor District Inc. Adams and his colleagues at Harbor District Inc., including executive director Lilith Fowler, who was instrumental in jumpstarting the Menomonee Valley as the first executive director of Menomonee B i zT i m e s M i l w a u k e e
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Valley Partners, believe they have come up with a good starting point to continue work in the Harbor District. The group is inviting the public to hear its plans and share their own ideas from 4 to 6:30 p.m. April 25 at Independence First, 540 S. First St. and from 4 to 6:30 p.m. April 27 at the UWM School of Freshwater Sciences, 600 E. Greenfield Ave. “We’ve taken all of the input we’ve received, and all of the work we did with our consultants, and based on that feedback, drafted recommendations on how to develop for the future,” Adams said. Once the water and land use plan is solidified, it will go before the Milwaukee Common Council to be used as a
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guideline for future development of the Harbor District. The plan addresses land use and economic development, transportation, parks and open space and the environment. “People want a little bit of everything down here,” Adams said. The Harbor District is bordered by First Street, Bay Street and Pittsburgh Avenue. It was cut off from the city and neglected for decades, but now is getting a closer look, in part because it is surrounded by three of the most in-demand neighborhoods in Milwaukee: Walker’s Point, the Historic Third Ward and Bay View. The Milwaukee inner harbor redevelopment project was one of two catalytic
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If you go: What: Harbor District water and land use plan community input meetings When: April 25 and April 27, 4 to 6:30 p.m. Where: April 25, Independence First, 540 S. First St.; April 27, UWM School of Freshwater Sciences, 600 E. Greenfield Ave. Purpose: Harbor District Inc. will share plans and is looking for feedback on new parks and a riverwalk to expand waterfront access in the Harbor District.
The Harbor District water and land use plan community input meetings will be sharing plans and looking for feedback on new parks and riverwalk that would expand on new waterfront access being developed as part of the Take Me to the River project pictured above. The project above is planned for the east end of Greenfield Avenue.
projects Milwaukee Mayor Tom Barrett identified in 2013 as part of his ReFresh Milwaukee 10-year sustainability plan. Barrett created Harbor District Inc. in 2015. Revitalization already is taking place in the district. The University of Wisconsin-Milwaukee completed the $53 million School of Freshwater Sciences in fall 2014. Wauwatosa-based developer Wangard Partners also is working on the Freshwater Plaza, a $48 million mixed-use project on eight acres at the corner of South First Street and East Greenfield Avenue. Other pieces of the Harbor District also have been tackled. In January, Quorum Architects Inc. and Ayres Associates Inc. were chosen by Harbor District Inc. to design a new public plaza on Milwaukee’s inner harbor at the end of Greenfield Avenue. Adams said that project is a first step. What will be unveiled at the public meet-
ings in April will show other possibilities to activate the waterfront, he said. Some of the other pieces will take more time. The city owns several large sites and many others are still privately held. One example is among the district’s largest parcels, the 46-acre former Milwaukee Solvay Coke & Gas Co. site at 311 E. Greenfield Ave. For years, the city tried to demolish the building on the site and the former owner refused to cooperate. On April 4, Wisconsin Gas LLC was the lone bidder in a bankruptcy sale of the property for $4 million. Wisconsin Gas, a predecessor company to WEC Energy Group Inc., is expected to close on the property in early May, said Cathy Schulze, a company spokesperson. Wisconsin Gas is one of a handful of companies responsible for contaminating the site years ago and therefore, must help pay for its cleanup. Schulze did not have an estimate on how much cleanup would cost or specific plans for the site. “Because we bear a portion of the remediation cost, we wanted to better be able to manage the costs,” Schulze said. “We are looking forward to working with the city and the Harbor District to revitalize this parcel.” Adams said the Harbor District also is looking forward to getting this large piece of land restored. “Our plan also encompasses Solvay Coke and we make recommendations for that area,” Adams said. “There might be changes when (Wisconsin Gas) figures out what to do and we incorporate their input. The first step is cleanup and reactivating that space to make it beneficial to the community again.” n w w w.biztimes.com
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Bank Mutual has a 125-year history of creating strong, local partnerships and developing resources and solutions to help individuals and businesses meet their goals. That’s why we are again pleased to sponsor the M&A Forum and provide a platform for professionals to gain knowledge about current trends and strategies affecting the ever-evolving merger and acquisition landscape. As the largest Milwaukee-based bank with $2.6 billion in assets, a strong branch network statewide and over $1 billion in local commercial loans funded, we understand the importance of keeping up with the changing business environment. Our highly responsive and experienced team supports businesses in a variety of areas, including cash flow lending and acquisition financing, treasury management, and international solutions. With the advantage of local decision making, we work closely with our clients to understand their business so we can better meet their individual needs. David A. Baumgarten President and Chief Executive Officer Bank Mutual
Reinhart Boerner Van Deuren is pleased to once again sponsor the BizTimes M&A Forum and contribute our informed perspective to the evolving conversation surrounding today’s mergers and acquisitions landscape. Our long-established M&A Practice encompasses a broad spectrum of industries, clients and activities, and we appreciate the opportunity to share our experience and insights on the most critical aspects of M&A transactions. Our attorneys are adept at managing the complex considerations that arise in the process of planning for and completing an M&A transaction, including regulatory, antitrust, business reorganization, banking, labor and employment, real estate, trusts and estates, employee benefits, and tax issues. We are deal makers and problem solvers who have the experience, insight and connections to help you achieve your goals and add value at any stage in the life of your business or venture. Sincerely,
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BUILT TO
SELL STORIES OF SUCCESSFUL EXITS
Kelly Fitzsimmons holds virtual reality glasses developed by her current startup, Custom Reality Services. BY MOLLY DILL, staff writer
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hen he was hired on as chief executive officer of ZyStor Therapeutics Inc., Loren Peterson had a directive to help the company gain the funding needed to bring its pharmaceutical product to market. He did that, raising $8.5 million from venture capital firms, mainly in the Milwaukee area, and then moved the company from St. Louis to Milwaukee in 2005. In 2010, ZyStor was acquired by w w w.biztimes.com
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BioMarin Pharmaceutical Inc. for $22 million upfront, with another $93 million promised if certain milestones were met in the ensuing years. It stands among the largest exits by Wisconsin entrepreneurs in recent years. ZyStor developed replacement therapies for lysosomal storage disorders. One of the main challenges of growing it was raising capital to fund its clinical trials. And once it had taken on investor funds,
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ZyStor ultimately was headed toward a sale to provide them with a return. “The assumption was all along and I think for most of these early stage (companies), at least in the drug development industry, you’re never going to raise enough capital to become a revenue producing company, so the endgame is always to sell to a larger pharmaceutical company,” Peterson said. “Health care startups are more likely 19
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nies, so the founders may not launch their companies with an acquisition in mind. “Sometimes, those companies think they’re going to be the next Google or the next Amazon,” Still said. “That market is so dynamic, who’s to say they’re not?”
MEETING A NEED
to pursue that approach because the sales and distribution of their product is different,” said Tom Still, president of the Wisconsin Technology Council. “Companies in the health care space, it’s more likely that they are starting with an acquisition in mind.” That’s partly because of the enormous cost of testing and launching a health care product, and also because the health care industry can be slow to adopt new 20
ideas, Still said. “A lot of times, (established) health care companies are looking outside for their best ideas, anyway,” he said. “(Health care startups) ultimately want to start out by identifying strategic partners. It’s not a casting bread upon the water approach – it’s more targeting those firms that stand to benefit the most from your idea.” In sectors like software, however, the barrier to entry is lower for new compaB i zT i m e s M i l w a u k e e
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The WTC cautions entrepreneurs to be open-minded when it comes to scaling and consider a variety of options, rather than starting out with a sale in mind, he said. “Just like every company is not primed for angel and venture (investment), likewise not every company is able to meet its full potential on its own,” Still said. Some entrepreneurs start a lifestyle business, without consideration of how or whether they will exit someday. When Kelly Fitzsimmons launched Sun Tzu Security in 1996, the Internet was in its infancy and she saw an unmet need. At a time when few people were focus-
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ing on information security, she established one of teh first pure play information security consulting firms to protect sensitive information such as company trade secrets on the Internet. “I realized pretty quickly that this was needed and all organizations would need something like this at some point,” Fitzsimmons said. She was right. The company grew to about 30 employees and in 2003, it merged with Chicago-based Neohapsis to further its growth. That year, the merged company expanded more than 40 percent year-over-year. “In 2003, it was really clear that we needed to be bigger and Neohapsis had the best reputation, bar none, in the security field,” Fitzsimmons said. The firms joined forces under the Neohapsis name, and in 2006 the company was acquired by California security consulting firm KSR Inc. (which later sold it
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m&a: big deals
to technology giant Cisco). Fitzsimmons exited Neohapsis when it was acquired in 2006 with a sizable enough payout to eliminate the debt from a failed spinoff and start a new company, Milwaukeebased HarQen, which offers on-demand phone and video interviewing tools. “As a professional services firm, there was really no expectation of exit,” Fitzsimmons said. “This was really a lifestyle business. Because of our brand, we were approached.” “It also allowed me to not take a salary for three years, in addition to the cash I put in,” she said. “I couldn’t have done HarQen if I hadn’t had that exit.”
REINVESTING THE PROCEEDS Some of the most successful Milwaukee entrepreneurs have been able to use the proceeds and knowledgefrom the sale of their first company to start one or more additional companies. 22
Among the most prominent exits have been New Berlin-based costume e-retailer BuySeasons Inc., which Jalem Getz and investors sold to Liberty Media Corp. in 2006; and Waukesha-based biotech firm Prodesse Inc., which Tom Shannon and investors sold for $60 million to GenProbe Inc. in 2009. For companies that have taken on investor cash to aid their growth, it’s imperative to provide a payout, said Jeff Rusinow, founder of Milwaukee-based Silicon Pastures Angel Investment Network. Rusinow has had six successful exits, including BuySeasons and Prodesse. “As an angel investor, you have to make sure that management is eager and focused on increasing shareholder value and setting up an exit to allow their investors to liquidate their investment within about four to six years,” Rusinow said. “That, to me, is kind of a good framework.” Rusinow also was a lead investor in B i zT i m e s M i l w a u k e e
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Waukesha-based ModernMed, a concierge medicine provider. “(Dialysis provider) DaVita Inc., they are so big that apparently back around 2010, 2011 they were whiteboarding and figuring out, ‘OK, what are we going to do in the future; how are we going to continue growing the company?’” DaVita evaluated setting up primary care clinics with a high level of customer service, which is exactly what Modern Med offered – more primary care physician access for a premium price. DaVita requested an informational meeting with ModernMed, and Rusinow seized on the opportunity. “After they met with our team, I was chairman of the board and I approached them and said, ‘Hey, would you be interested in making a strategic investment or acquiring us?’” Rusinow said. ModernMed was sold to DaVita for more than $20 million in 2012.
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As a lead investor in BuySeasons, Rusinow earned back 10 times his investment when the company was purchased for north of $55 million. “Recognizing that the deal has a disruptive technology, can establish a new market, you kind of have to look at these deals through that prism of them becoming a big player,” he said. “The success of that is we went from zero to $40 million in revenue in six years and became the largest seller of costumes online in the world.” BuySeasons co-founder Getz has since launched another successful startup, subscription e-retailer Wantable, which is growing at an even faster clip. Prodesse CEO Tom Shannon, who became involved when his investment group Shamrock Partners became Prodesse's lead investor, has since established Milwaukee-based venture philanthropy organization BrightStar
Our clients know. We get even the most complex deals done quickly and cost-effectively. We leverage the collective experience, contacts and market insights of our attorneys to locate strategic partners, connect prospective purchasers and sellers, arrange necessary financing and negotiate the most favorable results for our clients.
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m&a: big deals
Custom Reality Services co-founder Jeff Fitzsimmons demonstrates the Oculus Rift and Touch equipment used to view the company's virtual reality films.
Wisconsin Foundation Inc. He now donates his time and expertise to investing in and growing other Wisconsin startups. Bill Haack also stands as an example of an entrepreneur who made a successful exit and reinvested it in the Milwaukee economy, forming a second company and creating more jobs after his first venture. He gradually took on full ownership of his father’s insurance brokerage, Frank F. Haack & Associates, and grew it to 24
$28.5 million in revenue by 2003. “I joined that when there were six people,” Haack said. “We did grow it from six people to 120 people. What we did was focused on growing the business organically rather than through acquisition and in order to do that, we invested a lot in our capabilities so that we could win business in the marketplace. I assembled what I thought was a really firstrate team. Especially in the insurance B i zT i m e s M i l w a u k e e
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business, where so much of your success is determined by your people, that was a really key component.” In 2004, he sold Frank F. Haack to Glen Allen, Virginia-based Hilb Rogal & Hobbs Co. for an undisclosed sum. “We looked for (a buyer) who would be supportive of our culture and our commitment to our customers,” Haack said. Haack exited Frank F. Haack in part because he was focused on growing Zy-
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wave Inc., the spinoff company he had formed to meet a need he saw in the insurance market. It offered software tools used by insurance brokers and financial planners for tasks such as data analysis, compliance and risk management. “We discovered that what we were doing for ourselves, other brokers wanted us to do for them as well,” Haack said. “Obviously, we knew what our clients wanted because we were one.” The proceeds from the sale of the first company helped support the second. “It was a big advantage for Zywave that I was able to fund Zywave without having to go to any outside investors prior to 2008,” Haack said. By 2008, Wauwatosa-based Zywave had 125 employees. There wasn’t immense pressure to bring in outside funding for the rapidly expanding company, so Haack was able to be strategic about it, he said. “We were under no obligation to find an outside investor, but if someone was there who could help us continue to accelerate our growth, I would be happy to consider that,” Haack said. “That’s what drove that process.” When San Francisco private equity firm Vista Equity Partners invested, Haack made a partial sale of his ownership in Zywave. But he wanted to stay on because he found the business fun and felt there was more he could do. “The idea of selling, at least in my case, wasn’t something I had at all, at least in the beginning,” he said. “You’re constantly deluged by people who want to invest. We said no for a long, long time.” Haack and partner Jim Mueller continued to grow Zywave both organically and strategically, and by 2013 had about 600 employees. In 2013, Zywave sold its insurance solutions division to Aurora Capital Group, a Los Angeles-based private equity firm, and Vista retained ownership of the financial solutions division under the name Advicent Solutions. At that time, Haack sold more of his ownership stake in Zywave and took on a less involved role as a board member. Jackie and Derek Steinmetz built their vegan cookie business, Sweet Monkees, from a few recipes to a thriving startup before they sold it. The Steinmetzs, who were vegetarian at the time, purchased the recipes from a restaurant owner in New York in 2011 for a few thousand dollars.
Front row (left to right): Phil Shackton, Analyst; Michael Schroeder, Analyst; Ann Hanna, Managing Director; Tyler Carlson, Associate Back row: Tammy Halfmann, Executive Assistant; Corey Vanderpoel, Managing Director; LeRoy Matuszak, M&A Consultant
Results that speak for themselves In the last two years, we’ve seen a robust M&A market and have completed more than 20 transactions worth an aggregate of nearly $500 million, including these transactions:
Our dedicated investment banking practice is partnered with one of the largest CPA firms in the nation to provide unparalleled M&A, financial and tax resources. To learn more about how Schenck M&A Solutions can help, contact Ann Hanna at 414-465-5537 or ann.hanna@schencksc.com or Corey Vanderpoel at 414-465-5607 or corey.vanderpoel@schencksc.com.
Securities offered through Burch & Company, Inc., member FINRA / SiPC. Burch & Company and Schenck M&A Solutions are not affiliated entities. Ann Hanna and Corey Vanderpoel of Schenck M&A Solutions are registered investment banking representatives with Burch & Company.
schencksc.com/mergeradvisors © Schenck sc 2016 3.16
m&a: big deals “At the beginning, most of our sales were a few people that we knew just because they were amazing, which is not something you think of when you think of vegan cookies,” Jackie said. “Really we started just as any grassroots effort with a food business starts. We started taking the cookies to people.” The Steinmetzs first rented commercial bakery space to bake the cookies themselves, but eventually grew enough to contract with a bakery in Wauwatosa to make and distribute the products. Through persistence and grocery store demonstrations, Sweet Monkees cookies eventually were being sold in 12 Wisconsin grocery stores and at a number of area farmer’s markets. “It was still a pretty small business,” Jackie said. “We weren’t looking to be acquired by any other food companies. We were just looking for someone who was able to take the business and grow it beyond what we were able to do.” The couple sold Sweet Monkees to a Madison resident in 2014.
KEYS TO SUCCESS The key to success in growing a saleable business, Haack said, is solving a problem or meeting an unmet need in an industry in which you have expertise. “In a lot of businesses, obviously, there’s a focus on competition,” Haack said. “Frankly, since we kind of created our space, we’ve never had really direct competition.” Hiring the right employees also is important. “I’ve always been really happy with the team that I’ve had on board and I think it’s been really critical to our success,” he said. Since that first startup, Sun Tzu, Fitzsimmons has founded five other startups. “The No. 1 thing that I think most entrepreneurs don’t think about is brand. Brand matters,” she said. “Eighty percent of your exit value can be intangible.” Neohapsis served as a product testing lab for Network Computing magazine and archived a lot of information about vulnerability that was frequently used for research, both of which extended its reach
to a global audience. “Our name was well-known beyond our clients, it was well-known beyond our location,” she said. “It wasn’t known as a Midwestern company. “Now when I build companies, I’m thinking brand from the get-go. How do we build brand equity? How do people know we’re exceptional at what we do?” Since January, Fitzsimmons has been applying her expertise as co-founder and managing director-strategy at Milwaukee-based virtual reality filmmaker Custom Reality Services. ZyStor Therapeutics didn’t have a straight line path to an acquisition. “We thought we had a deal done with another company that kind of fell apart at the eleventh hour in 2008,” Peterson said. “So we continued on the company side to continue to do the work we were doing to position the company. The number of potential acquirers in our case was relatively small and BioMarin was among the top three potential acquirers all along.” Part of moving forward until it was
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finally acquired two years later meant going back to ZyStor’s investors to get more capital. Networking with potential investors at trade conferences along the way helped the company when it later needed cash, Peterson said. Jackie Steinmetz was able to use the profits from the Sweet Monkees sale – about two or three times what the Steinmetzs bought it for – to grow her second company, Milwaukee-based Accelity Marketing. She also applied lessons learned. “It helped me understand the hustle you need to run a business,” she said. “Just getting that baseline of understanding you’re an entrepreneur and working that much and the crazy hours and the weekends.” Jackie has no plans to sell Accelity, which she founded in 2013, and is focused on growing it. She also has the experience to know how to position a company if she were to sell again. “You can’t be the business. If you are doing all of the work and you don’t have any processes in place, it’s going to be really hard to sell,” Jackie said. n
a single-minded focus.
Pure valuation means that our well-credentialed professionals concentrate the full depth of their expertise on only one thing – getting to the right value for your business. Our focus goes beyond the typical valuation modeling scenario and deeper into your company’s specific needs and strategic issues to deliver efficient solutions. F I N D O U T M O R E AT VA L U AT I O N R E S E A R C H .C O M Bryan Browning - ASA, CFA 414-221-6249 · BBrowning@ValuationResearch.com
Dan Peterson - CPA 414-221-6256 · DRPeterson@ValuationResearch.com
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m&a: big deals
A.O. Smith CEO to share strategy at M&A Forum Panelists will discuss exit options and emotional toll
egy, then you could be doing M&A but you’re not really sure it’s creating value or the right kind of value or positioning your company and making sure it’s heading where you want it to go,” he said. Following the electric motor business sale, later in 2011, A.O. Smith acquired Lebanon, Tennessee-based boiler manufacturer Lochinvar LLC for $418 million. It was the largest acquisition in the history of A.O. Smith. And then for a couple of years, the company analyzed a number of potential acquisitions, but made the decision to walk away from some targets due to issues
Ajita Rajendra
The Pfister Hotel Marybeth Cottrill brings expertise and experience to serve our clients’ wealth management goals. Marybeth Cottrill, CFP®, AEP® | Private Wealth Advisor 414-287-7067 marybeth.cottrill@bmo.com
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Emcee - Melinda Davenport, WISN 12
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Friday, May 12
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that came up in due diligence and a desire to meet the criteria it had set out. Mergers and acquisitions are all about value creation, Rajendra said. “You want to really look at who your potential buyer is and make sure that buyer understands clearly the unique value that is created between the two companies,” Rajendra said. “If there isn’t value created, then any value created in the transaction goes to the seller, not the buyer. And you really want win-win.”
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business buyers and sellers learn what they need to know as they consider their options and move through the process. In his keynote address, Rajendra will share with attendees the journey of the 143-year-old company and its evolution into the leading U.S. water heater manufacturer. He also will discuss the value of not just organic growth, but also strategic acquisitions to creating value in a company. It can guide what a company does, but more often what it chooses not to do, Rajendra said. “If you don’t have a well-defined strat-
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hen A.O. Smith Corp. sold its electric motor business to Beloit-based Regal Beloit Corp. in 2011 for $890 million, the Milwaukee-based company got an influx of cash. Ajita Rajendra, who became chairman and chief executive officer of A.O. Smith in 2014, has been deploying the funds on strategic acquisitions while repositioning A.O. Smith as a portfolio of global water technology businesses. Rajendra will be the keynote speaker at the annual BizTimes Media M&A Forum on Friday, April 21, at the Milwaukee Marriott Downtown hotel. The event helps
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Tom Campion
Scott Happ
Jim McCormack
A.O. Smith has certainly created its own value. The company reported a record net income of $326.5 million and a record revenue of $2.69 billion for 2016. Earnings increased from $1.58 to $1.85 per diluted share. “We wanted to redefine ourselves as a water technology company,” Rajendra said. “We divested ourselves of the nonwater-related businesses and focused on making decisions in the water-related areas in markets that are growing. We feel that clean water is going to be in demand all over the world. We have a water infrastructure that is aging.” As part of that strategy, A.O. Smith in 2016 acquired Texas-based water treatment system developer Aquasana Inc. for $87 million. The company was a good fit because of its skills in selling direct-to-
Fritz Frazier
Andrea Wolf
consumer using web-based selling techniques and those are skillsets that Rajendra feels will be useful to A.O. Smith in the future. “Everyone’s buying through all channels, but the key is the decision-maker is going to become more and more the individual consumer. A lot of it is coming through digital means,” Rajendra said. “Regardless of how you’re selling, you really have to be well-versed in the digital marketplace.” In addition to Rajendra’s remarks, the M&A Forum also will feature two panel discussions. The first panel will discuss the uncertainties of selling and life after a sale. The panelists will include Tom Campion, managing director of Chicago-based Merit Capital Partners; Scott Happ, CEO
Specialists in Mergers and Acquisitions
Steve Heinen
Larry Burnett
of Plano, Texas-based Optimal Blue; Fritz Frazier, founder and former CEO and owner of West Allis-based Winter Services Inc.; and Jim McCormack, chairman of Brookfield-based Diversified Insurance Solutions. The discussion will be moderated by Andrea Wolf, vice president of commercial banking for Brown Deer-based Bank Mutual. Frazier’s goal was to exit the dayto-day of running Winter Services by the time he turned 50. But he hardly told anyone he was in the process of actively marketing and selling the company until the deal was finished about 18 months later, which brought on tremendous pressure. “I was very concerned with not getting it out on the street and not impacting my business because I know individ-
Dave Rolston
Ann Hanna
uals who tried to sell their business and it falls apart,” Frazier said. “It was difficult to keep that in the inner circle. I’ve been in business over 30 years and I can say it was probably one of the most stressful times of my life.” Frazier bought Winter Services from William Hanney in 2006 and sold it to Pennsylvania private equity group FNB Capital Partners in August 2015, so he has been both a buyer and a seller. In the time he owned it, Frazier grew the snow removal company from $1.8 million to $20 million and expanded it from Milwaukee to a seven-state footprint. Exiting the business was like creating a vacuum of time and energy and a sense of urgency for Frazier, he said. ................... M&A FORUM continued on page 30
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m&a: big deals
What is your business worth? Top 10 tips for valuation
P
utting a price on a business can be tricky, especially considering the many factors that can influence value. Business owners who are interested in finding out how much their company is worth can take these steps to add and measure value. 1. Evaluate your options. Management buyout, private equity recapitalization, gifting shares to a family member, employee stock ownership plan, strategic buyer, asset sale…depending on the type of exit an owner plans to make, the value of the company is different. 2. Analyze value drivers. Efficiencies realized in a merger, industry position, growth trends, quality and reputation of the business, cash flow and profitability,
customer relationships, economies of scale, financial performance, human capital, marketing strategy, strategic vision and technology all make a big impact on value. 3. Determine the range of value. Will the business continue to operate after the sale, or is it being liquidated? What is fair market value versus investor or liquidation value? The difference can be drastic, depending on the type of transaction. 4. Establish your financial objective. If an owner wants to take the money and run, a strategic buyer might be a good choice. If she wants to remain involved in the business, a recapitalization may work well. If there is a strong desire to maintain the status
Small business loans. Easy online application.
quo, an ESOP would be ideal.
5. Get to know your banker.
Access to debt and equity capital is a key value driver. Think about how to increase yours. 6. Diversify your customer base. It’s tough to sell a company with one or two customers providing the majority of orders. What happens if those customers decide not to buy your product anymore? 7. Figure out where you stack up. Ask an outside expert to compare your company’s financial performance to others in your field, lay out assets and liabilities and identify trends.
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Draw up an official account of the strategic vision and enumerate how the company will get there. It gives potential buyers an idea of what to expect in terms of later investment. 9. Specialize in a few things. Diversify the company’s product mix to assure it isn’t heavily impacted by business cycles and it can meet several of a customer’s needs. 10. Track market reputation. Know where the company stands in market position and potential industry headwinds. Have a strong marketing plan in place and solidify the brand. n Source: Valuation Research Corp., Milwaukee.
M&A FORUM................................. from page 29
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8. Formalize the game plan.
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“So while you’re secure and it was a major accomplishment in my life personally and professionally, to reflect on the impact I had on people and families and subcontractors and vendors and that my little snowplow business provided for people and allowed other businesses to grow because of my success, it’s pretty emotional,” he said. Jim McCormack co-founded Brookfield-based insurance brokerage Diversified Insurance Solutions 35 years ago and was the majority owner until he sold to its employees through an Employee Stock Ownership Plan Jan. 1. He will discuss his dedication to rewarding his employees and making sure they were taken care of when he exited. “There was no question it was the best thing for the organization and my associates,” McCormack said. “There’s no regrets. Personally, there’s really no regrets either. It’s just a matter of minor adjustments in lifestyle.”
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The second panel will cover options for business sellers through a case study of a business owner considering an exit. The panelists will include Steve Heinen, managing director of Omaha, Nebraska-based First Capital Partners; Larry Burnett, shareholder and corporate law practice co-chair for Milwaukee-based Reinhart Boerner Van Deuren s.c. and Dave Rolston, president and CEO of Milwaukee-based Hatco Corp. The discussion will be moderated by Ann Hanna, managing director of Milwaukee-based Schenck M&A Solutions. First Capital Partners focuses on providing growth capital to small businesses, and often completes partial sales. Recapitalization is an option business owners should consider, Heinen said, because they could get “two bites of the apple” and the new investor expertise provides opportunity for growth. “You get immediate professionalization across a number of fronts. Legal, financial, strategic, board level, operations…hiring and firing,” he said. n
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Interesting time to talk trade he Metropolitan Milwaukee Association of Commerce’s World Trade Association will host the annual Wisconsin International Trade Conference on Thursday, May 11, at the Wisconsin Center in downtown Milwaukee. Needless to say, it is a very interesting time to talk about trade. President Donald Trump has promised to shake up U.S. trade policy and business owners who rely on foreign customers are no doubt wondering how Trump’s policies will affect their companies. One of Trump’s first actions as president was to pull the U.S. out of the 12-nation Trans-Pacific Partnership negotiated by the Obama administration. “We’re going to stop the ridiculous trade deals that have taken everybody out of our country and taken companies out of our country, and it’s going to be reversed,” Trump told union leaders on the day he signed the executive order to pull out of the TPP, according to a New York Times report. He said that from now on, the United States would sign trade deals only with individual allies. “I think you’re going to have a lot of companies come back to our country,” Trump said, according to the report. But some criticized Trump’s move to dump the TPP deal.
“President Trump’s decision to formally withdraw from the Trans-Pacific Partnership is a serious mistake that will have lasting consequences for America’s economy and our strategic position in the Asia-Pacific region,” Sen. John McCain (R-Arizona) said in a statement. The TPP isn’t the only trade deal Trump doesn’t like. During the presidential campaign, he called the North American Free Trade Agreement a “disaster” for the United States. But his administration now is seeking only limited changes to the agreement known as NAFTA, the Wall Street Journal reported. U.S. organized labor leader Richard Trumka blasted the Trump administration’s initial plan to revamp NAFTA, calling it “very timid.” With U.S. trade policy in a state of flux, the Wisconsin International Trade Conference will provide information to help businesses deal with the rapidly changing trade landscape. The breakfast program for the conference will include the Governor’s Export Awards, presented by Gov. Scott Walker, and a panel discussion with the award winners moderated by Lt. Gov. Rebecca Kleefisch. The morning portion of the conferw w w.biztimes.com
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President Donald Trump being sworn in on January 20, 2017 at the U.S. Capitol building in Washington, D.C.
ence will feature several breakout sessions, including: »» Navigating the changing European business landscape; »» Export compliance violations; »» Roundtable discussions with trade experts. The lunch program will feature remarks from John Murphy, senior vice president of international policy for the
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U.S. Chamber of Commerce. The afternoon portion of the conference also will feature several breakout sessions, including: »» Finance and international volatility; »» Make e-commerce work for you; »» Roundtable discussions with trade compliance experts. The conference will conclude with a networking reception. n 31
MMAC'S WORLD TRADE ASSOCIATION
SPECIAL EVENT COVERAGE
W ISCON SIN I N T E R N AT IO N A L T R A D E C ON F E R E N C E
Dear Wisconsin business owner:
A Gov. Scott Walker
s Wisconsin’s economy continues to improve, our administration has taken numerous steps to ensure businesses of all sizes and all industries can succeed and thrive in our ever-changing global economy. Since 2011, we’ve cut taxes by $4.7 billion, made state government more efficient, adopted pro-business policies such as the state manufacturing and agriculture tax credit, and invested more than $110 million in workforce development. And we are continuing to provide support and assistance to Wisconsin companies looking for ways to grow their business and expand into new markets by exporting their products internationally. As the annual Wisconsin International Trade Conference kicks off in Milwaukee, the importance of exporting to our state’s economy cannot be overstated. In 2016, about 8,500 Wisconsin companies exported $21 billion worth of goods and services to 200 countries. While some may think only major corporations can succeed in exporting, the truth is that nearly 90 percent of the companies selling overseas are small and midsize companies. Regardless of the size of your company, you can succeed in exporting, and the state of Wisconsin, through the Wisconsin Economic Development Corp., has experts in the state and around the world poised to help you develop a successful exporting strategy. One of best ways to develop a strategy is through the ExporTech Program, which serves as a gateway to exporting by offering
face when entering new markets in 79 different countries. Another great way to expand or start exporting efforts is to take part in one of the WEDC’s trade trips, and I would like to invite you to join Lt. Gov. Rebecca Kleefisch on her trade mission to Mexico in June. During the six-day trip to Mexico City and Monterrey, representatives from your company will have the opportunity to take part in individualized, one-on-one meetings with potential partners handpicked by WEDC’s international team. For details, learn more at inwisconsin.com/
companies guidance and structure in creating and implementing an exporting plan. Assistance also is available to help companies grow their exports through the Global Business Development Grant Program, which supports strategic export expansion initiatives such as website translation, market assessment, partner and distributor searches, and trade show attendance. In the past six years, Wisconsin also has dramatically expanded its global network of trade representatives who can help address the concerns and challenges companies may
mexico2017.
As we look forward to honoring this year’s finalists and winners of the Governor’s Export Achievement Awards, it’s worth noting that each of these companies had to build its exporting efforts from the ground up and is now seeing the results pay big dividends in terms of market growth and increased revenue. For more on how your company can start or expand its exporting efforts, visit inwisconsin.com/export.
Sincerely, Gov. Scott Walker
Exporting in Wisconsin: 2016 Recap Wisconsin exports totaled $21 billion in 2016, a 6 percent decline from 2015. Much of the decline in Wisconsin and around the country can be attributed to the increasing strength of the U.S. dollar, which ended 2016 at a 14-year high. While there will be yearly fluctuations in export figures, the long-term trend for Wisconsin is a positive one. From 2010 to 2016, exports grew by 6 percent. During that same period, the state also experienced double-digit increases in exports to Mexico, Japan and the UK.
million, or 186 percent – followed by Mexico, with an increase of $80.7 million, or 2.7 percent. Wisconsin companies exported goods and services to 200 different countries in 2016, and state exports were up in 88 countries compared to 2015. Looking ahead, Wisconsin can expect to experience an increase in exports of medical-related equipment, as countries like China and India start to improve upon and invest in their healthcare industry.
Kuwait was the country that posted the largest dollar value increase from 2015 to 2016 – $107.5
Other opportunities exist in Wisconsin’s manufacturing of precision equipment used in the aviation and aeronautics industry, as well as energy and power control. With the increasing worldwide focus on fresh water, Wisconsin also is well-positioned as a global leader in water technology, with its efforts supported by The Water Council.
TOP MARKETS FOR WISCONSIN EXPORTS IN 2016
TOP EXPORT PRODUCT CATEGORIES IN 2016
Aircraft/spacecraft and parts was the product category that grew by the largest dollar volume from 2015 to 2016 – an increase of $193.4 million, or 41 percent.
COUNTRY
2016
2015
CATEGORY
2016
2015
Canada
$6.59 billion
$7.31 billion
Industrial machinery
$5.2 billion
$5.8 billion
Mexico
$3.05 billion
$2.97 billion
Medical & scientific instruments
$2.3 billion
$2.4 billion
China
$1.42 billion
$1.55 billion
Electrical machinery
$2.0 billion
$2.2 billion
Japan
$865 million
$815 million
Non-rail vehicles & parts
$1.6 billion
$1.7 billion
United Kingdom
$813 million
$825 million
Plastic products
$1.0 billion
$1.0 billion
SOURCE: WISCONSIN ECONOMIC DEVELOPMENT CORP./U.S. CENSUS BUREAU
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TRADE IN TIMES OF CHANGE Breakfast Program: 8:00 AM -9:15 AM
The Governor’s Export Awards presented by
Panel Discussion with Award Winners moderated by
GOV. SCOTT WALKER
LT. GOV REBECCA KLEEFISCH
Concurrent AM Sessions: 9:45 AM - 11:15 AM
NEW
Export Café - Roundtables with Experts Six roundtables will discuss specific issues and challenges of selling internationally.
Navigating the Changing European Business Landscape
Export Compliance Violations - This Could Happen to You!
Learn how to chart a course for your business in the emerging European political environment.
Experts will review recent violation cases, identify what went wrong and help prevent your company from making the same mistakes.
Lunch Program: 11:45 am - 1:30 pm
Keynote speaker JOHN G. MURPHY VP for International Policy, U.S. Chamber of Commerce
Murphy directs the U.S. Chamber’s advocacy relating to international trade and investment policy and has led successful campaigns to win congressional passage of trade agreements with a dozen nations. Murphy plays a key role in advancing international business priorities before Congress, the Administration, foreign governments and the World Trade Organization.
Concurrent PM Sessions: 1:45 PM - 3:15 PM
NEW
Compliance Café - Roundtables with Experts
Finance and International Volatility
Make E-commerce Work for You!
Six roundtables will discuss specific issues and challenges of compliance regulations.
Knowledgeable financial experts will share how to remain financially flexible in the constantly evolving international arena.
Learn from seasoned experts how successful companies are leveraging technology to survive and thrive.
Networking Reception: 3:15 PM - 5:00 PM
Experience Wisconsin’s largest & most respected conference on global trade.
THURSDAY, MAY 11, 2017
7:30 am - 5:00 PM • Wisconsin Center, Milwaukee $175/WTA member - $200/non-member - $80/Student - $65/Lunch or breakfast only
www.WisconsinTradeConference.com
MMAC'S WORLD TRADE ASSOCIATION
SPECIAL EVENT COVERAGE
W ISCON SIN I N T E R N AT IO N A L T R A D E C ON F E R E N C E
Finalists for the 2017 Governor’s Export Achievement Awards Award winners will be announced at the World Trade Association’s 2017 Wisconsin International Trade Conference on May 11.
Automated Pet Care Products Inc.
Juneau-based Automated Pet Care Products Inc. (doing business as AutoPets) has been designing and manufacturing high-tech pet products for more than 15 years. AutoPets’ flagship product, the “Litter-Robot,” is an automatic, self-cleaning litter box for cats.
Carnivore Meat Co.
Green Bay-based Carnivore Meat Co. is a family-owned producer of raw pet food and treats. Under the Vital Essentials brand, it is the nation’s leading private label provider in the raw pet food industry and is the world’s innovation leader in raw pet food, treats and snacks.
CMD Corp.
Appleton-based CMD Corp. designs and manufactures high-performance converting machinery for bags, pouches and flexible packaging and has diversified into the energy sector, offering reliable compressed natural gas fueling equipment and comprehensive service plans. 34
CONNOILS LLC
Fyxation Bicycle Co.
Nelson and Pade Inc.
Death’s Door Spirits
Gehl Foods LLC
Red Flag Cargo Security Systems
Waukesha-based CONNOILS LLC is a global leader in manufacturing and distributing high-quality natural, organic and nutritional internally stabilized bulk oils, oil powders, softgels and specialty ingredients meant for the nutraceutical, cosmeceutical, pet nutrition and sports nutrition industries.
Middleton-based Death’s Door Spirits is a super-premium spirits company whose name is inspired by the Death’s Door passageway between Washington Island and the Door County peninsula of Wisconsin. Death’s Door Spirits is one of the cornerstone brands in the craft spirits movement and is an industry leader in distilling, committed to creating truly exceptional spirits.
Eagle Technology Inc.
Eagle Technology Inc., a Mequon-based company, is a leading developer of enterprise asset management and computerized maintenance management solutions for the worldwide facilities market. B i zT i m e s M i l w a u k e e
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Milwaukee-based Fyxation Bicycle Co. designs and produces a complete line of bicycles and components that are available at domestic and international bicycle retailers. Its products are designed in Milwaukee and distributed worldwide.
Germantown-based Gehl Foods is a 120-year-old manufacturer that produces fresh-tasting, shelf-stable, real dairy products such as cheese sauces and dairybased beverages.
Lucigen Corp.
Founded in Wisconsin in 1998, Middleton-based Lucigen offers products and services that enable life science professionals to perform their research and testing more efficiently and effectively. The company has grown to manufacture and sell more than 130 biomedical research products and services to customers worldwide.
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Montello-based Nelson and Pade Inc. helps people get started and become successful in aquaponic food production by providing proven, patented Clear Flow Aquaponic Systems, comprehensive training and long-term grower support.
Milwaukee-based Red Flag Cargo Security Systems provides client companies with comprehensive solutions to secure supply chains and improve credibility with border security programs.
Spaulding Clinical
West Bend-based Spaulding Clinical supplies clinical services for the global pharmaceutical market. The company conducts clinical research trials for pharmaceutical companies around the world and supplies, services and reads electrocardiography devices for global clinical trials.
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How will Trump impact trade? U.S. Chamber expert provides insight
First as a candidate and then in the early days of his administration, President Donald Trump has promised to make big changes to U.S. trade policy to help bring more jobs back to the United States.
sional support of trade agreements with a dozen nations, including Colombia, Panama and South Korea.
How will Trump’s trade policies really affect the U.S. economy?
Murphy will be a keynote speaker at the Wisconsin International Trade Conference on Thursday, May 11, at the Wisconsin Center in downtown Milwaukee. The conference is presented by the Metropolitan Milwaukee Association of Commerce’s World Trade Association.
John Murphy, senior vice president for international policy for the U.S. Chamber of Commerce, can provide some insight. Since joining the chamber in 1999, Murphy has led its campaigns to get congres-
In advance of the conference, BizTimes Milwaukee editor Andrew Weiland spoke with Murphy about pressing U.S. trade policy issues. Following are excerpts from that interview.
One of his first actions as president was to pull the U.S. out of the Trans-Pacific Partnership trade agreement.
Murphy
BizTimes: It seems to be an interesting time to be discussing trade as the new presidential administration is determined to make major changes in U.S. trade policy. Do you have any general thoughts about the Trump administration’s approach? Murphy: “It’s common in any presidential contest for a lot of wild and woolly things to be said about trade. I remember Barack Obama threatening to withdraw from (the North American Free Trade Agreement) in 2008. But the world looks different once you are sitting in the Oval Office. I think the business community appreciates that the Trump administration is committed
President Donald Trump
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to expanding American exports, committed to getting rid of the foreign market access borders that often shut out American goods and services, and having stronger enforcement of our trade agreements. But the devil’s in the details. How are we going to move forward on some of the signature issues, like renegotiating NAFTA? That’s an area where we are really at the beginning of the journey.” BizTimes: You mentioned NAFTA, so let’s get into that. What can we expect to come out of a renegotiation of the NAFTA deal? Murphy: “This is an area where I think members of Congress, the business community and the agriculture community are looking for further details. We’ve been reassured by Commerce Secretary Wilbur Ross that their goal is to expand American exports, not to throw up new trade barriers. And I think that they’ve heard from many stakeholders in recent weeks about the value of our trade ties to Canada and Mexico. These are our top two export markets in the world by a large margin. There are 14 million American jobs that depend on trade with Canada and Mexico, $3.5 billion of trade a day. Secretary Ross recently made the comment that we want to preserve all of that trade but we want to examine what are the barriers that persist that sometimes make it difficult for American exporters to compete?” BizTimes: How cooperative will our NAFTA trade partners be with a renegotiation?
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Murphy: “If you look at the agreement calmly and in the light of day, you see an agreement that is 23 years old that was negotiated, to give one example, before the Internet existed. That’s one example of something that could be added and is not particularly controversial. The Mexicans, they also have cards to play. For many American agricultural products Mexico is the largest market in the world, like corn, for instance. And that’s why you hear folks like Sen. (Chuck) Grassley of Iowa expressing great concern about NAFTA renegotiation because the Mexicans could rather easily start to purchase a lot more corn and wheat and other agricultural commodities from South America. It’s going to be a give and take. I think the American farmers and ranchers who have really benefitted a great deal from NAFTA are aware of this and are making their voices heard, which I think is positive.” BizTimes: Do you have any concern when the president talks tough about companies moving jobs outside of the country, threatening them with tariffs? Murphy: “You catch more flies with honey than with vinegar. The way to get more investment in the United States is through measures to create a more welcoming investment environment. This administration is already taking a number of steps, whether it is halting the regulatory overreach that we’ve seen in recent years, the promise of tax reform, which is going to be a difficult fight in Congress, but there’s a lot
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fastest growing markets for U.S. exports. But there are increasingly concerns in a number of sectors. China in recent years has been moving away from the market liberalization that we had been seeing 10 or 20 years ago. We see more efforts by the Chinese government to create national champions, to strengthen their stateowned enterprises, and often this comes at the expense of foreign enterprises. They create incentives and industrial policies that favor the domestic firms and put foreign competitors at a disadvantage. And so many sectors are effectively closed for a U.S. company’s participation. Their ability to invest and do business there is in question in a variety of sectors. Whereas the U.S. economy, when it comes to investment, is pretty much wide open with just two or three exceptions. I think this is an administration that is going to be asking, ‘What are the tools in the toolbox we could use to get a little leverage to try and seek a more level playing field with China?’” BizTimes: What about the Trump administration’s approach on immigration? It’s been very controversial. He has obviously talked a lot about illegal immigrants from Mexico. Of course, he wants to build a border wall. He also wants to impose a temporary travel ban from some Middle Eastern nations. What impact does this approach have, if any, on international trade? of excitement about what that can mean. We’ve seen an energy revolution in North America. Energy costs for American businesses today are much lower than they are for their international competitors. These are all factors that are making businesses more keen to invest and do business here. And if we can see more focus on those kinds of policies, that’s what’s going to foster job creation here in the U.S. That’s what’s really front of mind for most business executives today.” BizTimes: One of President Trump’s first actions was to cancel the United States’ participation in the TPP trade deal. Was that a good move? Murphy: “The question remains, what’s the strategy for tackling the issues that the TPP was designed to address? The factors that led the TPP to be negotiated remain. And they include the fact that by 2030, twothirds of the world’s middle class consumers will be in Asia. They have an appetite for American products. However, many of 38
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those markets have high barriers that shut out U.S. goods and services. An agreement like the TPP is a way to get past those barriers. So if it’s not going to be the TPP, what is the strategy? The administration has said it is interested in pursuing some bilateral trade agreements. I think they are going to feel a lot of pressure to devise a strategy to address a lot of the problems that the TPP was designed to address.” BizTimes: Trump has raised a lot of concerns about China as well. He has talked about currency manipulation. Americans have been concerned for years about intellectual property theft and the number of jobs that have been moved to China. But American consumers have benefitted from being able to buy low cost goods made in China. What strategy should the U.S. have in dealing with China as a trade partner? Murphy: “I think this is an area that the administration wants some more tools in the toolbox for addressing some of the challenges there. China has been one of the
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Murphy: “I think it’s worthwhile for any administration to think about its soft power and not just the hard power of military force. There’s a great line by (Defense Secretary Jim) Mattis, who testified on the budget for the State Department, saying if we cut the budget of the State Department, (he was) going to have to buy more ammunition. I think this is the kind of thing that new administrations come to appreciate over time. Diplomacy, development programs, the influence American business has around the world, the fact that hundreds of thousands of foreign students come and study in our universities. This is all critical to our influence around the world. I worked for many years in Latin America, and it’s really striking the degree to which you find leaders in government or the private sector who studied at American universities. That absolutely has an influence. I think the policies you are talking about, they need to be framed in a way that takes the importance of these channels of influence into consideration.” n
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Grants available for companies entering, expanding in export markets
BY CHAD HOFFMAN, for BizTimes
I
n November 2015, the Milwaukee 7 Regional Economic Development Partnership launched the Export Development Grant Program presented by JPMorgan Chase. The program provides financial assistance to small and medium enterprises, both those new to exporting and experienced exporters, to enter new markets by accessing resources, overcoming obstacles and seizing on opportunities internationally. The program provides matchHoffman
ing funds of up to $5,000 per company. The funding can be used for a multitude of export-related purposes and may also be combined with grants offered by the Wisconsin Economic Development Corp. Companies are asked to provide a narrative explaining how the funding will help grow their exports. Any and all uses of the funds will be considered, including: attending foreign trade shows, attaining foreign approvals, translating marketing material and websites, utilizing the U.S. Commercial Service and attending ExporTech, to name a few. To date, the M7 Export Development Grant Program has provided just more than $243,000 to 61 companies to assist them in growing their export business. To date, 17 companies have completed their various
projects and have submitted economic impact and milestones. In addition to half of the companies reporting having entered new international markets for the first time, export sales growth figures resulting from these efforts total $9.1 million. Two companies that traveled to new markets in 2016 are American Exchanger Services Inc., with locations in West Allis and Hartford, and TLX Technologies LLC of Pewaukee. TLX Technologies was founded in 1996 to bring to market several patented, high-speed digital valves for controlling the force of a vehicle airbag inflation event during a crash. In the years that followed, TLX went on to strategically cultivate other opportunities utilizing these patented solenoid features. Currently, TLX is producing
custom solenoid and valve components for a variety of markets that include automotive, transportation, industrial and fire protection.
TLX leverages funds to exhibit in Dubai
TLX Technologies utilized the M7 Chase grant to exhibit at an international trade show for fire protection in Dubai,
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LEFT: A horizontal high pressure feedwater heater manufactured by American Exchanger Services. BELOW: A rectangular steam condenser manufactured by American Exchanger Services.
United Arab Emirates. Having a presence at this show gave TLX greater visibility to potential customers from both the Middle East and Asia. As a small, Wisconsin-based manufacturer, the M7 grant has helped TLX Technologies to become a strategic global leader in the fire protection market. American Exchanger Services specializes in innovative engineering, quality manufacturing, aftermarket and turnkey field services for the power generation, pulp and paper, and process industries. As an active Heat Exchange Institute member company and American Society of Mechanical Engineers certified code shop, AM-EX is uniquely capable of providing the most reliable and efficient heat transfer equipment, such as feedwater heaters, main steam surface condensers and balance-of-plant heat exchangers, to meet the most stringent specifications. AM-EX’s dedicated field service division and experience in condenser retubing allow the company to offer diverse solutions for any heat transfer requirements.
AM-EX applies grant to business development in Asia
AM-EX utilized the grant funds from the
M7 Export Development Grant Program to travel to several Asian countries for the purpose of business development. In addition, the M7 grant also subsidized the cost of ExporTech, a Wisconsin Manufacturing Extension Partnership program. Particular focus was given to locating various channel partners in strategic locations, generating leads for both aftermarket service and new fabrication projects. With excess capacity and volatility in the domestic power generation market, exporting has provided an opportunity to minimize local fluctuations by accessing a larger total market with expanding trends in emerging markets. For this year, AM-EX export sales account for more than 50 percent of total bookings, and if trends continue as expected, are forecast to increase further in the coming years. Along with the various projects, the M7 grant helped AM-EX solidify a multimillion-dollar contract within the focused power generation markets. For more information or to apply for the M7 Export Development Grant Program presented by JP Morgan Chase, please visit choosemilwaukee.com. n
BRIDGE TO BUSINESS — FOR PEOPLE WHO CAN ACTUALLY BUILD ONE. Connecting engineers with business know-how.
Bridge to Business for Engineers is an immersive, 14-day experience to give early-career engineers business fundamentals. The course is offered by Marquette University’s Opus College of Engineering and College of Business Administration and sponsored by Milwaukee-based manufacturer Rexnord. Students receive a blend of classroom and real-world interactive learning opportunities, and study the integration of business disciplines — accounting, finance, information systems, legal/regulatory, marketing, management, and supply chain management — all with an engineering overlay. Register now for one of two sessions: Session 1 begins May 22. Session 2 begins June 26. Learn more at go.mu.edu/bridge2biz. Phone: 414.288.EXEC (3932) Email: biz@marquette.edu
Chad Hoffman is the export development director for the Milwaukee 7. w w w.biztimes.com
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Finance and international volatility
W
ith today’s news cycle running 24 hours a day and policy narratives being shaped by 140-character messages, the velocity of potential volatility certainly has increased. As businesses are faced with this emerging reality, the choices laid out are to watch it unfold and react, or proactively prepare to address the possible implications. This year at the World Trade Association’s Wisconsin In t er n a tion a l Glaub
k n a h T ! u o Y
BY BRUCE GLAUB, for BizTimes
Trade Conference on May 11, the finance session co-chaired by me and Bryan Mulkerron, vice president, senior relationship manager at Bank of America Merrill Lynch, will attempt to navigate the turbulent state of global trade through the experiences, expertise and narratives of seasoned panelists. The panelists are Nancy Ebben, director of international finance at Oshkosh Corp.; Jeffrey Eineichner, chief financial officer at Power Test Inc.; and Lee Hornick, vice president of finance for Winsert Inc. The companies and their respective executives provide a diverse backdrop for this year’s finance session, as each occupies a different space in industry, operational size and resources
deployed. They demonstrate how their preparedness allows them to react and make better and more profitable decisions for
their respective companies. As turmoil emerges from topics like free trade agreements (North American
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Free Trade Agreement, Trans-Pacific Partnership and Regional Comprehensive Economic Partnership) and their renegotiations, withdrawal or U.S. exclusion; tax reform proposals; continued sanction discussions; Brexit, Frexit, Nexit and Grexit, each executive reflects on the potential impact to his or her international trade strategies. They must consider the resources at all stages of expansion and how to prepare their staff to utilize the available resources. Eineichner’s experience in leveraging state resources such as the Wisconsin Economic Development Corp., the ExporTech program, Milwaukee 7 and others have assisted him in steering Power Test clear of the choppy waters in previous volatile moments. With roughly 50 percent of Winsert’s operations tied to international trade, Hornick has considered various structural options related to maximizing tax benefits and the potential implications of the proposed U.S. tax discussions. Ebben and her team are involved with sales to almost every country in the world and are incredibly creative in mitigation of as much risk as possible, utilizing virtually every mitigation tool known and even creating a few herself. Mulkerron and I also are no strangers to advising businesses on international volatility. I currently advise clients of Trade Acceptance Group Ltd., a firm that provides
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trade credit insurance and export finance solutions to U.S. exporters. Mulkerron previously worked as a risk management consultant at Euler Hermes, an Allianz company, the world’s largest trade credit insurer, and now works in the global commercial bank, advising middle-market companies at Bank of America Merrill Lynch. While the only true constant is change (something the participants know all too well), it is more evident and rapid in the current environment. The result is that preparation, planning and knowledge of the available financial resources in the global arena are crucial for continued success and rapid response. The export market still provides an immense opportunity for Wisconsin companies and will only grow over time. Financial flexibility is needed in order to realize the benefits, just as agility is required for every other discipline within your business. Without this knowledge, a company’s ability to pivot becomes significantly more difficult, if not impossible. n
You are here You want to be here WMEP & Wisconsin’s Extended Export Partnership has a process to help you develop and execute an export expansion growth plan. WMEP’s “Best in the Nation” ExporTech™ program has a proven track record of profitable export results for Wisconsin’s manufacturers.
Call Roxanne Baumann today to discuss where you want to go and how the WMEP can help you get there. 262.442.8279 or email: baumann@wmep.org
For more information, please visit: WMEP.org
Bruce Glaub is a principal at Trade Acceptance Group Ltd. w w w.biztimes.com
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Mapping the European business landscape BY PAUL BYRNE, for BizTimes
I
f you think the U.S. has gone through a lot since last November, take a look at Europe. The fissures that have become all too apparent in the U.S. are magnified across the European landscape, impacting everything from economic activity and trade to political structures and national relationships. Basic flaws that were a part of the original European Union foundation have created some cracks under political and economic pressure from both inside and outside the member nations which appear to be irreparable – at least in the short term. Add to that the significant change in tone coming across the seas from the U.S., creating a recipe for a great deal of business uncertainty for companies on both sides of the Atlantic.
Welcome to the new international business reality. Trade relations could very well go back to the days before the World Trade Organization, before the EU integration, perhaps to even before the Bretton Woods Agreement. No one knows yet. Clearly, the perceived negative impact of globalization (i.e., trade) is a major political force on the left and on the right in many countries. This force is having a macroeconomic impact on structural relationships at both the national and international level. It manifests itself in immigration, tariff, labor, and goods and services issues, where emphasis is placed on building up stronger economic “borders” at others’ expense. Suddenly, globalization is cast as a zero sum game.
But the globalization ship already has sailed. There is too much at stake for too
Expand your perspectives. Optimize your decisions.
many international interests to revert back to the disconnected, national mar-
Friday, April 28, 2017 7:30 a.m. - 12:30 p.m.
Exchange ideas with other CEOs and business leaders. See renowned speaker and author Patrick Lencioni address the untapped advantage of organizational health. He’ll dive into the 4 steps to achieving long-term success with a special focus on executive team cohesion and alignment. Limited Seating! Register now at tecmidwest.com/leadership
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Wednesday, July 12, 2017 7:00 AM - 11:30 AM Potawatomi Hotel & Casino
Transitioning Your Wisdom and Your Wealth Join BizTimes and a distinguished group of family business owners and leaders for a morning of inspiration and hands-on learning to help you embrace the next generation of change in your business. Our speakers and roundtable sessions will spur new thinking and expand on existing ideas around culture, growth, transition, sustainability and legacy.
Thousands in Brussels protested against transatlantic free trade deals during a march in September.
kets of previous times. Technology, communications, interlinked supply chains and many other advances have ensured that the trend toward international trade should continue, albeit with more fits and starts in the near term. So two questions must be asked: 1. How long and how intense will the reaction be against globalization? 2. What can my company do to navigate the uncertainty? Some speculate that what we are witnessing is the last gasp of economic nationalism, with pressure from people, primarily in Europe, who are directly impacted by increased international trade. Until now, many governments worked very hard to shield their own from negative effects of globalization, but as these governments now find they can no longer pay the price for protection, the bargain starts to break down. On this side of the Atlantic, significant international trade has been a part of our landscape at least since the 1970s, and while there have been many efforts to blunt some of the harsher impacts, the policy overall was rather laissez-faire. On average, industry in the U.S. now is well-positioned to compete both at home and abroad. Europe, in general, still needs to transition through this stage, where the intensity of pushback may be felt the most. The rise of more nativist political parties in Europe, Brexit concerns, and the trade challenges
coming out of Washington could signal a more aggressive approach to shutting off imports through tariffs or other means. Doing so will put pressure on the WTO and if strong enough, break down some of the multilateral agreements currently in place. On the positive side, many leading European companies already have developed a sound international footing capable of competing internationally, and should act as a brake on harsher standards that would negatively impact their businesses across markets. Time will tell how long and how far trade may revert to a more bilateral relationship. For a U.S. company looking to maintain or grow its business in Europe, the main issue will be the more immediate effects of exchange rates. At this time, the U.S. dollar valuation is reckoned by many to be somewhat overvalued relative to the euro. Cyclical in nature, fluctuations represent a normal course of business challenges over a cycle. In real terms, the current USD overvaluation is less than in the early 2000s and even in the 1980s, when manufacturers had more concerns about the ability to export. For each company, the real key will be to carefully watch the evolving European landscape for signs of political interference that impacts the normal economic cycle among companies in both regions, for better or for worse. Stay tuned. n Paul Byrne is vice president/general manager of Bradley Corp.'s Building Specialties Group.
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Author and family business expert Tom Deans will again kick-off the program with a keynote address. He will share insights from his best-selling book, “Willing Wisdom: 7 Questions Successful Families Ask.”
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Millennials need to know they matter to their employers
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went to a conference recently, attended by approximately 85 senior level human resources professionals (almost entirely vice presidents and chief human resource officers) and about 30 service providers in the HR space. I was intrigued on the first day by two service providers who arrived casually dressed in skinny jeans and pullovers. They were surrounded by the predominantly baby boomer and older Gen X crowd in more traditional business attire. They could not have been more comfortable. They were, without question, the two youngest people at the conference. Their service was cutting edge, and the other attendees were extremely impressed with these two young, hip guys from New
York with a tech-y kind of startup. It was fitting, then, that two key themes of the speakers over the course of two-anda-half days were employee engagement and the attraction/retention of millennials. One of the speakers, Darcy Smith, VP of team development at CustomInk, spoke about how her company attracts and retains its next generation of team members. Ranking on Fortune’s list of the 100 Best Workplaces for Millennials, CustomInk has an extremely engaged and happy workforce. Seventy-nine percent of its employees are identified as millennials and about 95 percent of them report being proud to work for CustomInk. This is the place, by the way, to design your T-shirts online at CustomInk.com.
Their philosophy is “custom T-shirts have the power to turn your group into a team, elevate your gathering to an event or make your special moment more… well, momentous.” Smith, equipped with an easy-to-see energetic passion, makes CustomInk a great place to work by ensuring employees (known as Inkers) are happy and healthy. Along with a casual, flip-flop work environment, CustomInk upholds three core values, all employee-centric: 1) A sense of belonging; 2) meaningful work; and 3) a fun environment. At the same time, CustomInk has a passionate commitment to doing whatever it takes to satisfy the customer. At this conference, a number of senior corporate leaders spoke about their millennial cultures. The overwhelming question was, “What can we do to retain
A LETA N O R R IS GENERATION Y you, “Don’t let the flip-flops fool you!” In contrast: I came back to Milwaukee and met with a group of CEOs. One of the CEOs said, “I need to rally my people around a priority in our business. I’m hearing so much about the focus on employees, but I don’t think that’s what it is. We are a family-owned business. I think we need to rally everyone around the family. I need them to be passionate about the family who owns this business.” This message will invariably leave employees thinking, “Well, what about me?”
Collaboration Matters. Our design/build process offers great opportunity for innovation through collaboration and teamwork.
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our people?” The answer was all about the people. Similar to CustomInk, which realizes, “If we can foster a sense of belonging, allow people to do meaningful work and create a fun environment, our employees will stay.” The chief executive officer, Marc Katz, is quoted in an interview saying, “The term ‘company culture’ actually kind of makes me cringe. It sounds sort of corporate and superficial. The fun stuff, like the free food, cool events and clever names for things, that’s great, but if it was just that stuff without real substance, I think it would be very hollow.” So, it’s not just about the employees. A big part of it, though, is about the employees. And these are hard-working, do-whatever-it-takes people. They will share with
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The kind of messages we’re hearing from millennials do not support a “company-first” message. Rather than focusing on the values they deem most important, such as work-life balance, employee recognition, loyalty and respect, millennials said their employers are too focused on things like teamwork, profit and customer satisfaction. All of that is important, of course. Fundamentally, though, if you want these things, employees have to know that they matter to you first. n Aleta Norris is a co-founding partner of Brookfield-based Living As A Leader, a leadership training, coaching and consulting firm. You may send questions to her at anorris@livingasaleader.com. To read all of her columns, visit the knowledge portal at www.livingasaleader.com.
strategies
W E ’ R E B U I LT TO B E WISCONSIN’S BANK FOR B U S I N E S S™
Butting heads over price Work together to reduce costs
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he latest Farmers Insurance commercial shows a ram butting his head against his own reflection on a truck door. Well, negotiating price sometimes feels like you’re a ram and the other person is the truck door. The seller may have a preconceived idea of what the price should be based on the market demand, his raw material, manufacturing costs and his target margins. The buyer, on the other hand, has shopped the market and knows what he is willing to pay based on his budget guidelines. Depending on who opens the negotiation, the history of the relationship and the urgency of the need, the head-ramming begins. If the buyer goes first, he sets the tone by stating, “This is the price I need” or “I can’t pay more than this price.” If the seller goes first, she may inquire as to the price the buyer is looking for. Sellers usually don’t like to anchor the price range by stating a price. They also may ask, “How many units would you require and when would you expect delivery?” If the unit price varies based on volume, the seller may be able to offer a lower price if the buyer commits to more units. As you can see, this is a multi-variable negotiation. We are not just talking price,
but volume, a delivery schedule and potential long-term agreements. When I was a director of purchasing at a major New York department store, we tried to have as many annual agreements as possible to guard against price increases. In fact, the retailer’s agreements stated that if there was a price increase, it could release one last shipment at the contracted price. This permitted a more accurate budgeting of expenses. The company’s largest annual agreement was for gift boxes. Almost ninety percent of the order was consumed in the weeks between Thanksgiving and Christmas. It took the company’s three vendors all year to produce the quantity it required. Due to fashion trends and hot gift items, no doubt the company would run out of a size and require a reorder. That was always a separate negotiation. I learned from my vendors the keys to achieving the best price. Considering setup time for each size, volume was the major driver of the lowest price. The longer the run, the less the set-up cost impacted the final price. Sizes were added over the years that were similar, so the company combined sizes and extended the runs, thereby lowering the price per unit. The company used the same strategy with merw w w.biztimes.com
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CARY SILVERSTEIN NEGOTIATION chandise bags, its second largest expense. Delivery was the next challenge; the retailer always wanted to aim for a full truckload to each location to minimize freight costs. Lastly, the company’s annual gift box requirements were sent out to a number of local manufacturers for bid, thus elevating the level of competition in the market. It also made it known the retailer was open to any suggestion that would maintain quality but reduce its costs. Rather than being the ram in the commercial, we chose to work collaboratively with our suppliers to find ways to reduce their costs and ultimately, the company’s price. There was no butting of heads; we were determined to find win-win solutions while maintaining strong business relationships. n
We’re proud to be Wisconsin’s Bank: built here, for here, with no plans of leaving. We’re not only experts at the banking services we provide to businesses across the area; we’re experts at this area. We know the businesses we serve and understand and appreciate that they are vital to the success and health of Wisconsin. We know the challenges—and satisfaction— that comes with running a business in this area and we’re honored that the who’s who of Wisconsin, depend on the who’s who of banking.
414-273-3507 www.townbank.us
Cary Silverstein, MBA, is a writer, speaker and community volunteer who splits his time between Scottsdale, Arizona and Fox Point. He is the co-author of the book “Overcoming Your NegotiaPhobia,” and can be reached at (414) 403-2942.
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I want to meet Bob Parsons
We can learn a lot from how the billionaire entrepreneur does business
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very time I go to a new city, I MUST make a pilgrimage to the local motorcycle dealership. Last week while in Scottsdale, Arizona, I needed a little service work on my BMW F800GS. So I went to GO AZ Motorcycles & Scottsdale Harley-Davidson. I didn’t know anything about GO AZ, but I was blown away the minute I entered. First, the “dealership” is a 14-acre campus in a Scottsdale industrial park. It was unbelievably impressive, with the HarleyDavidson portion occupying more than half the campus. As I chatted it up with the service writer (we’ll call him “Ted”), he told me he was also from Wisconsin. I asked, “How do you like it here?” “I will never work for anyone else,” he said. “Bob Parsons is the most in-
Bob Parsons
credible man I have ever met.” Who the heck is Bob Parsons and why is he so incredible? It’s not something you would hear every day. How many of your employees would say that about you? Parsons barely finished high school and
then joined the Marines, serving a tour in Vietnam. He received a Purple Heart, the Vietnam Gallantry Cross and the Combat Action Ribbon. After creating a software package called MoneyCounts, which eventually was sold to Intuit (think Quicken), Parsons founded GoDaddy.com. At the dealership, loud music started blaring as I saw a guy about my age getting a tattoo. It felt just like the beginning of a Packers game at Lambeau. Then a huge gong sound came from the floor. A couple had just signed the paperwork on a new Harley. But what happened next was even cooler. Every employee in the store ran over to the couple and gave them a congratulatory hug. Every employee. Without a doubt, this was my best retail store experience ever.
My guesses at why he succeeds
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Uber-engaged employees. A fun, exciting, shopping experience. Fantastic customer service. How do they do it? I want to meet Parsons and ask him. But until then, here’s my best guesses. 1. Selection. And I’m not talking about inventory here. Clearly GO AZ and Scottsdale Harley-Davidson know how to pick the right people. Every person I encountered was positive and customer-focused. I must find out their screening and selection process. 2. The legend. Every business has (or should have) a “legend.” Jeff Bezos packaging books in his Boston apartment. Hewlett-Packard’s garage. Bob Parsons buying the dealership because of lousy customer service. Embrace your legend and tie it to your purpose. 3. Purpose. While I didn’t see any posters about their core values or purpose, clearly GO AZ is a purpose-driven organization. I suspect helping others in need and creating a fun lifestyle are central to their purpose. Knowing their philanthropic values, I would definitely buy my next bike there, and even pay a little more if necessary. Let’s be real here: Not every business can
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JO H N H OW M A N MANAGEMENT donate all or even most profits to charity. But every business probably can find its own brand of philanthropy and fun that might inspire its employees and patrons. 4. Bob’s 16 Rules for Entrepreneurs. They’re at bobparsons.com/my-16rules and they come through loud and clear. OK, so neither you nor I are Bob Parsons. We’re not billionaires and our employees don’t worship us. Despite this, let’s be determined NOT to carry on with business as usual.
How to be more like him First, associate with the right people – people who are right for you and your business. And it starts with a cultural match. Too often, we’re attracted to folks with the right technical skills but the wrong culture. That doesn’t work. This is true for customers, vendors and team members. Second, understand your purpose and the purpose of your organization. And then communicate it loudly and clearly and repeatedly. Jim Clifton of Gallup wisely said, “Your customers will never be more engaged than your least engaged employee.” He’s 100 percent correct. Third, work on the first two all the time. Improving your hiring practices and hosting strong weekly meetings, effective quarterly offsite meetings and substantive annual retreats will take you a long way in this endeavor. Regardless of whether I’m in the market for a new bike, I STILL want to meet Bob Parsons! n As a serial entrepreneur, business and community leader since 1983, John Howman has led a variety of businesses, from technology to consumer products. He leads two groups for TEC, a professional development group for CEOs, presidents and business owners. He can be reached at JHowman@AlliedCG.com.
biz connections CA L E NDAR
NONPROFIT DIRECTORY
College Possible will host its Dream Big Dinner on Thursday, April 27, from 5:30 to 8:30 p.m. at the University of Wisconsin-Milwaukee ballroom. The event will celebrate the program’s 2017 college graduates. College Possible is dedicated to coaching promising low-income students to and through college. Tom and Jennifer Florsheim will co-chair the event. Tickets are $150. For more information or to register, visit http://bit.ly/2nEIG4X.
SPOTLIGHT
The University of Wisconsin-Milwaukee will host Osher Lecture Series: The Future of Milwaukee – Mike Gousha on Wednesday, May 3, from 6 to 7:15 p.m. at the UWM School of Continuing Education, 161 W. Wisconsin Ave., Suite 6000 in Milwaukee. For more than 30 years, Gousha has interviewed just about everyone who has had an impact on Milwaukee: government leaders, business executives, community activists, sports and entertainment celebrities and everyday citizens. He will host a discussion of what is necessary for a successful and prosperous future for Wisconsin’s largest city. The event is free but requires pre-registration. For more information or to register, visit http://bit.ly/2nEQ7JC. The Metropolitan Milwaukee Association of Commerce’s World Trade Association will host its Wisconsin International Trade Conference on Thursday, May 11, from 7:30 a.m. to 5 p.m. at the Wisconsin Center, 400 W. Wisconsin Ave. in Milwaukee. Speakers at the 53rd annual conference will include Gov. Scott Walker and Lt. Gov. Rebecca Kleefisch. The event attracts about 500 attendees and also includes the Governor’s Export Awards. Cost is $175 for WTA/MMAC members, $200 for non-members and $65 for breakfast or lunch only. BizTimes Media will host the 2017 BizExpo on Wednesday, May 24, from 7 a.m. to 7 p.m. at Potawatomi Hotel & Casino, 1721 W. Canal St. in Milwaukee. Attendees at the 13th annual BizExpo will connect with hundreds of businesses, meet thousands of other professionals and learn from the area’s top business leaders. The day also includes the Women in Business breakfast, the Bravo/I.Q. Awards luncheon and the BizBash Cocktail Reception. Register in advance for free admission to the show floor and seminars. For more information or to See the complete calendar of register, visit www.biztimes.com/bizexpo. upcoming events & meetings.
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Waukesha-based BSI received an ASID Award and was recognized for outstanding interior design work during the 41st annual Wisconsin ASID Awards Gala. BSI won a Silver Award for the GS Global Resources world headquarters facility in Mukwonago. This 23,600-square-foot project was designed, built and furnished by BSI associates. BSI’s design team used a mix of materials, including stained concrete, wood, glass and metal, to create a modern industrial look. The space includes an entrance and lobby, two multi-purpose work lounges, an open office with islands for collaboration, a conference room and a training room integrated with the latest in audio visual technology. In addition to design build furnish services, BSI provided audio visual solutions, window treatments, artwork and custom signage to heighten GS’ environmental branding initiatives.
Golden Angels Investors LLC Golden Angels Investors LLC, a Brookfield-based angel group of more than 150 members, has been certified as an Established Angel Group by the Angel Capital Association. Golden Angels is the first Wisconsin-based group to be so certified. This status indicates that reasonable steps have
Year founded: 2001 Mission statement: Strengthening Milwaukee’s workforce through arts internships that help teens develop career skills. Primary focus: Equipping teens with transferrable job skills. Other focuses: Arts-based experiences.
BIZ NO T ES BSI
ArtWorks for Milwaukee
207 E. Buffalo St., Suite 600, Milwaukee 414-708-9996 | www.artworksformilwaukee.org Social media channels: Facebook, Twitter, Tumblr, Instagram
been taken to verify the group’s member investors are accredited investors for SEC purposes. EAG certification removes the burden of angels having to provide documentation of their wealth or income to issuers and other third parties for deals and add-on investment to funds. The legal paperwork related to verification proof for 506(c) entrepreneurs is significantly reduced, making the deal process faster and easier. There are now 26 EAG certified groups in the country.
Northwestern Mutual Wealth Management Co. Seven advisors at Northwestern Mutual Wealth Management Co. have been named to the 2017 edition of the Financial Times’ 400 Top Financial Advisors. The list honors the top financial advisors at national, independent, regional and bank broker-dealers across the U.S. The criteria by which they are measured are: assets under management; AUM growth rate; experience; advanced industry credentials; compliance records; and online accessibility. The advisors are: Richard Kelton, The Kelton Financial Group; Steven Miura, The Miura Group; Michael Schwartz, Pioneer Financial; Kevin Spahn, Spahn Financial; Scott Sparks, Sparks Financial; Steven
To have your business briefs published in a future issue of BizTimes Milwaukee send announcements to briefs@biztimes.com. w w w.biztimes.com
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Board of directors: »» Nicole Anderson, NEA & Associates »» Leanne Delsart, Wraparound »» Marquayla Ellison, Ellastic Designs »» Deanna Moore, Goodwill Industries »» Melissa Dorn Richards, Material Studios + Gallery »» Michael Van Someren, Davis & Kuelthau s.c. »» Ong Vang, SITE Staffing Inc.
Number of employees at this location: 4.5
Is your organization actively seeking board members for the upcoming term? Yes.
Key donors: »» Bader Philanthropies »» MPS Partnership for the Arts »» CDBG »» Zilber Family Foundation »» Greater Milwaukee Foundation
What roles are you looking to fill? We are looking for members with experience in workforce development, workplace equity, economic development, the arts, law, human resources, fund development, event planning, volunteer management and marketing.
Executive leadership: »» President: Tracy Dzbinski, Forrer Business Interiors »» Treasurer: Michael Matias, ManpowerGroup »» Secretary: Mary Reynolds, ManpowerGroup
Ways the business community can help your nonprofit: Corporate sponsorship, donations of time or resources, and career coaching and other volunteering.
Tennant, Tennant Financial; Matthew Wunder, Wunder Financial.
David J. Frank Landscape Contracting Germantown-based David J. Frank Landscape Contracting Inc.’s snow and ice management services department has been certified to the ISO 9001/SN9001 standards by Smithers Quality Assessments. The certification attests to the company’s superior quality service for snow and ice management, and reflects its dedication to continuous improvement of customer satisfaction
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Key fundraising events: Night by the River: www.nightbytheriver.com
through systematic refinement of internal processes. International Organization for Standardization certifications are awarded by a third-party auditor performing extensive research into an organization’s structure, procedures and policies, confirming that services meet rigorous criteria to ensure customer satisfaction, as well as meeting all regulatory and statutory requirements. David J. Frank Landscape Contracting has successfully demonstrated effective snow removal management, and will continue to be assessed for renewal of certification on an ongoing basis.
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biz connections PER SO NNE L F I L E
■ Banking & Finance Chicago-based Signature Bank added Michael Weber as vice president of commercial banking, covering the Milwaukee territory.
Wisconsin Bank & Trust, Glendale, has named Steven Clark vice president, treasury management. In this role, Clark oversees treasury management statewide. Waukesha State Bank hired Sherri Krabath as a mortgage consultant. Krabath comes to Waukesha State Bank from Equitable Bank, where she served as senior mortgage loan officer. She has more than 34 years of financial experience, with 23 years of residential lending expertise.
■ Building & Construction Rick Nierzwicki has joined CG Schmidt, Milwaukee, as preconstruction director. He has three decades of construction experience and is a returning employee of CG Schmidt. He has worked with clients throughout the Midwest within the industrial and manufacturing industry, as well as senior living.
Submit new hire and promotion announcements to www.biztimes.com/submit/the-bubbler
as a business analyst. He is responsible for analyzing clients’ data, along with industry trends and insights.
■ Legal Michael Best & Friedrich LLP announced that Craig A. Stoehr has joined the firm’s Milwaukee office as a partner in the corporate and transactional practice. Stoehr will lead the growth of the firm’s international transactional practice group. He has extensive international experience, having lived and worked in the U.S., Europe and the Middle East, and has facilitated transactions in more than 50 countries. Stoehr previously was a corporate partner with Latham & Watkins LLP, where he opened and managed the firm’s Qatar office.
David J. Espin has joined Petrie + Pettit, Milwaukee. Espin focuses his practice on business law, with an emphasis on business formation, corporate transactions, business bankruptcy and commercial workouts.
Bialzik
Whitney Kohner, Mann & Kailas S.C., Milwaukee, has promoted Melinda A.
Bialzik, Zach Whitney and Ryan Billings to shareholder.
N. Kurpad, MD, PhD,
has been promoted to project manager at The Roberts Group in Waukesha. She recently celebrated her two-year anniversary with The Roberts Group as an account coordinator. In those two years, she worked with health care-related clients. RyTech LLC, Milwaukee, has hired Barb Richter as vice president of business development. Richter will be responsible for expanding RyTech’s presence in southeastern Wisconsin and will work from the digital marketing firm’s Milwaukee office.
Hanan
Tau VISIT Milwaukee has hired Claire Hanan as a communications manager, Emily Tau as its communications coordinator and
Amanda Buhrman Buhrman
as a digital marketing manager.
■ Professional Services Jennifer Fadrowski has joined EmPower HR, Milwaukee, as director of administration. Fadrowski has more than 20 years of experience in payroll and administration. In this position, she will be responsible for overseeing the firm’s dedicated service teams and the technology and solutions team.
joined New Berlinbased Hastings Air Energy Control as the vice president of finance and accounting. Hastings designs custom-engineered
MacKay
STIR Advertising & Integrated Messaging, Milwaukee, has hired Andrew Rose-Rankin as director of marketing and Monica MacKay as PR director. MacKay will lead STIR’s PR group and work side-by-side with the social media team for full integration of content strategies and execution. RoseRankin will have a dual role of new business development and account service at STIR. Previously, he was the executive digital director at Platypus Advertising and Design.
air quality solutions.
■ Staffing
Kirk Ruhnke, an award-winning writer and creative director with a nearly 35-year career in advertising, has joined Mortenson Safar Kim as executive creative director in the firm’s Milwaukee office.
Billings
Marketing & ■ Public Relations Kathleen Dohearty
■ Insurance
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Elizabeth Siepmann
Rose-Rankin
The Medical College of Wisconsin, Wauwatosa, has appointed Shekar
After contributing to New Berlin-based HNI Risk Services’ analytics department, Mitchell Keiper joins the team full-time
■ Professional Organizations
Ryan Golinvaux has
■ Health Care
chair of the department of neurosurgery. Kurpad has served as interim chair of MCW’s department of neurosurgery since March 2016, and also serves as professor of neurosurgery; medical director, spinal cord injury center; and clinical director, spine care.
the strategic communications firm. In her role as president, Dohearty will be responsible for marketing insights and research, as well as managing Branigan Communications’ senior team members and building client relationships.
Dohearty
has been promoted to president of Branigan Communications. She assumes the title of president from Tom Branigan, who will continue as chief executive officer for
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Ben Juech will serve on the Lutheran Home Foundation board’s joint investment committee and fundraising committee.
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Tetzke
Murphy
WFA Staffing Group has promoted Kristin Tetzke to operations manager and Roberta Murphy to vice president.
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n GLANCE AT YESTERYEAR VOLUME 23, NUMBER 2 APRIL 17 - 30, 2017 126 N. Jefferson St., Suite 403, Milwaukee, WI 53202-6120 PHONE: 414-277-8181 FAX: 414-277-8191 WEBSITE: www.biztimes.com CIRCULATION E-MAIL: circulation@biztimes.com ADVERTISING E-MAIL: ads@biztimes.com EDITORIAL E-MAIL: andrew.weiland@biztimes.com REPRINTS: reprints@biztimes.com PUBLISHER / OWNER
Bay View tunnel This photo shows a flushing tunnel intake in Milwaukee’s Bay View neighborhood. It is likely the Kinnickinnic River flushing tunnel intake, which is located near East Russell Avenue and South Lincoln Memorial Drive. The more than 7,000-foot-long tunnel extends to the Kinnickinnic River at South Chase Avenue. It was built in 1887. — This photo is from the Milwaukee Public Museum’s Photo Archives collection. Additional images can be viewed online at www.mpm.edu.
Dan Meyer dan.meyer@biztimes.com DIRECTOR OF OPERATIONS
Mary Ernst mary.ernst@biztimes.com DIRECTOR OF STRATEGIC INITIATIVES
Jon Anne Willow jonanne.willow@biztimes.com
EDITORIAL EDITOR
Andrew Weiland andrew.weiland@biztimes.com MANAGING EDITOR
Molly Dill molly.dill@biztimes.com REPORTER
Corrinne Hess corri.hess@biztimes.com REPORTER
Arthur Thomas arthur.thomas@biztimes.com INTERN REPORTER
Maredithe Meyer maredithe.meyer@biztimes.com
SALES & MARKETING DIRECTOR OF SALES
Linda Crawford linda.crawford@biztimes.com ACCOUNT EXECUTIVE
Molly Lawrence molly.lawrence@biztimes.com ACCOUNT EXECUTIVE
Maggie Pinnt maggie.pinnt@biztimes.com ACCOUNT EXECUTIVE
Christie Ubl christie.ubl@biztimes.com ACCOUNT EXECUTIVE
Lena Tomaszek lena.tomaszek@biztimes.com SALES INTERN
Salimah Muhammad salimah.muhammad@biztimes.com
PRODUCTION & DESIGN GRAPHIC DESIGNER
Alex Schneider alex.schneider@biztimes.com ART DIRECTOR
Shelly Tabor shelly.tabor@biztimes.com
Independent & Locally Owned — Founded 1995 —
COMME NTA R Y
The shifting retail landscape
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rick-and-mortar retail is going through a dramatic and rapid transformation. On the one hand, many brick-andmortar stores are dropping like flies. Sears, Roebuck & Co. is closing 150 Sears and Kmart stores this year. J.C. Penney Co. Inc. recently announced it will close 138 stores. Macy’s Inc. will close 68 stores this year. Payless ShoeSource Inc. closes nearly 400 stores. General Wireless Operations Inc. closed 200 RadioShack stores in March. Hhgregg Inc. closed 88 stores. Abercrombie & Fitch plans to close about 60 stores this year. Sun Capital Partners closed all of its nearly 250 The Limited stores across the country on January 8. I could go on…but I think you get the picture. Southeastern Wisconsin has seen its fair share of store closings, too. Amazon clearly has changed the retail game. If your family is anything like mine, you probably are spending far less time 52
at brick-and-mortar stores these days because almost anything you need can be bought for less on Amazon and delivered right to your door. My next-door neighbor works at the Amazon fulfillment center in Kenosha and raves about the sophistication of the operation. You don’t even need to do your grocery shopping at brick-and-mortar stores anymore, thanks to delivery services such as Peapod. But on the other hand, there are several new retail developments that are being built, or have recently been completed, in the Milwaukee area. The Corners of Brookfield, anchored by the state’s first Von Maur store and one of the biggest retail developments in the region in years, opened recently. Meijer Inc. has built several stores in the area. Kohlberg Kravis Roberts is planning Mills Fleet Farm stores in Oconomowoc and Kenosha. Many of the new stores that are getting built are part of mixed-use developments B i zT i m e s M i l w a u k e e
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that often include apartments, restaurants and entertainment venues. Mixeduse projects like The Corners, 84South in Greenfield, Whitestone Station in Menomonee Falls and Drexel Town Square in Oak Creek are attracting tenants. What seems clear about brick-andmortar retail is that its survival will depend upon the experience provided to shoppers. For some, shopping is still an enjoyable experience to do in person, so stores that provide a fun, exciting atmosphere will thrive. The mixed-use town center-style developments clearly are better positioned to deliver a great experience than traditional enclosed malls or dull strip malls. A major component of many of these developments is restaurants, which are attracting more customers at the same time many brick-and-mortar stores are struggling. It’s no wonder the traditional malls, like Brookfield Square, have been adding more restaurants in an attempt to make themselves more of a destination. Malls
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ANDREW WEILAND Editor BizTimes Milwaukee
must continue to transform themselves into entertainment destinations, not just places to shop. That’s probably why Simon Property Group made a deal with Marcus Theatres to add a movie theater complex next to Southridge Mall. Expect retail property owners to increasingly look for ways to evolve their properties with a mix of uses to attract more customer traffic. Yet above all, the biggest advantage brick-and-mortar retail still has over online retail is customer service. To survive, brick-and-mortar retailers are going to have to offer outstanding customer service; not good – outstanding. Customers seeking a low-price commodity retail product are going to keep shopping online. n
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Diversity & Inclusion Leadership MRA-The Management Association recently hosted a Diversity & Inclusion Leadership event at the Harley-Davidson Museum in Milwaukee. Capt. Ron Johnson of the Missouri State Highway Patrol, who led police security during the 2014 Ferguson, Missouri protests, gave a keynote address about crisis leadership and businesses’ need to promote diversity to build stronger communities. 1 Capt. Ron Johnson of the Missouri State Highway Patrol and Susan Fronk, president and chief executive officer of MRA.
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Heather Latona of Wausau Equipment Co. Inc., Ann Mazer of Super Products LLC, Robin Brugman of Three Harbors Council, Doreen Shaffer of Potawatomi Hotel & Casino and Nina Johnson of Guaranty Bank.
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Charlotte Freeman, Liz Goldberg and Rebecca Conde,
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all of Cedar Community. 4 Kevin Muhs and Nikki Payne of Southeastern Wisconsin Regional Planning Commission and Sam Williams of the Boys and Girls Clubs of Greater Milwaukee. 5
Grady Crosby of Johnson Controls and Andres Gonzalez of Froedtert & the Medical College of Wisconsin.
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Jack Pawley, Lori O’Malley and Kathryn Clouse, all of Kohler Co.
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Daryl Powers and Jacqueline Morris of Gateway Technical College with Sharlane Sanchez of Arena Americas Event Design.
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MRA President and CEO Susan Fronk starts the conference as the opening keynote speaker.
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ERICH SCHROEDER PHOTOGRAPHY
the last word
Why sleep works Kathy Thornton-Bias is president and chief operating officer of Milwaukee-based Verlo Mattress. She says companies should implement a corporate sleep strategy to improve productivity. “Each morning, I greet my staff by asking how they slept. This may sound odd, but not at Verlo. For almost 60 years, Verlo has focused on making the best mattresses possible because so much depends on a good night’s sleep. “Sleep is the pathway to better health, productivity and performance. It affects our relationships, our thinking and our ability to problem-solve and reason. In short, sleep is the foundation of our overall wellbeing. “Sadly, most people don’t get enough sleep. This is demonstrated in the workplace with employees who are TIRED: TARDY INDECISIVE RISKY
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EDGY DISENGAGED
Kathy Thornton-Bias President and chief operating officer Verlo Mattress 301 N. Broadway, #300, Milwaukee Industry: Mattresses and sleep products Employees: 60 in corporate offices www.verlo.com
“How can a company encourage well-rested employees? By launching a corporate sleep strategy. Consider this:
1. Rethink the red-eye. Thinking of booking your staff on the red-eye to LA for a big presentation? Think again! Their lack of sleep will affect their performance and make them less effective. You want your team to be refreshed and focused.
2. Restock the break room.
3. Sleep on the job.
Does your office kitchen look like the junk food aisle at the grocery store? Kick the caffeine, trans fats and sugar habit! For sustained energy, balance treats with protein- and nutrient-rich foods, like nuts, yogurt, fruit and whole grains.
Power naps have been proven to improve memory and creativity. Perhaps that’s why Google, Zappos and Ben & Jerry’s provide nap rooms for their employees. Create energized, high-performance teams, one nap at a time! “Wake up, Milwaukee! Sleep better.” n
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Panel 1: The Uncertainties of Selling and Life after a Sale A focus on the emotional aspects that business owners encounter when selling a company and changes they may face post sale. Panelists: • Tom Campion, managing director, Merit Capital Partners (1) • Scott Happ, chief executive officer, Optimal Blue (2) • Jim McCormack, chairman, Diversified Insurance Solutions (3) • Fritz Frazier, founder and former CEO and owner, Winter Services, Inc. (4) Moderator: • Andrea Wolf, vice president - commercial banking, Bank Mutual (5)
Panel 2: The Exit Universe – Know your options A case study look at a seller’s options including strategic buyers, PEG buyers, MBO and ESOP. Panelists: • Steve Heinen, managing director, First Capital Partners (6) • Larry Burnett, shareholder and corporate law practice co-chair, Reinhart Boerner Van Deuren s.c. (7) • Dave Rolston, president & CEO, Hatco Corporation (8) Moderator: • Ann Hanna, managing director, Schenck M&A Solutions (9)
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Concurrent breakout sessions:
The Nuts and Bolts of Buying a Business A look at the various considerations involved in acquiring a business, including the stages of an acquisition. Moderators: • Nate Neuberger, shareholder, Reinhart Boerner Van Deuren s.c (10) • Mike Wirth, director, Mason Wells (11)
Run it to sell it What if the time was right and a buyer approached you? A look at the strategies that business owners should employ daily in order to be ready should the market come to them. Moderators: • Mark Bruss, vice president, Bank Mutual (12) • Larry Burnett, shareholder and corporate law practice co-chair, Reinhart Boerner Van Deuren s.c. (7)
Driving Value through Price and Structure A discussion on closing the gap between buyers and sellers - 2017 trends Moderators: • Ann Hanna, managing director, Schenck M&A Solutions (9) • Corey Vanderpoel, managing director, Schenck M&A Solutions (13)
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