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Northeast Ohio leaders believe GOP debate will be valuable learning experience for next summer — P. 3 Developer plans to turn former Parker Hannifin headquarters into multitenant business complex — P. 4
Did Steris deal push Synergy to kill big expansion plan? British firm says in court hearing that federal antitrust inquiry was just one factor in decision By CHUCK SODER csoder@crain.com
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If marijuana is legalized in Ohio this fall, a litany of issues will be created for businesses expecting to profit from cannabis.
Legalizing pot is hazy matter for banks, biz By JEREMY NOBILE jnobile@crain.com
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He wasn’t smoking it. He didn’t even touch the stuff. Yet pot still got the Cleveland entrepreneur kicked out of his bank. The man operated a company providing a supporting service to cannabis farmers and ancillary businesses. His bank eventually connected the dots, realizing (partly because of the business’ name) he was working with marijuanabased companies. Despite decades with the same bank, when his ties to the cannabis industry were discovered, his business accounts were closed. His personal ones came next, said Walter |
from growers, dispensaries and other marijuana-related enterprises because of federal laws and regulators who penalize banks for engaging with what they still classify as highly risky, federally illegal businesses. And that creates a litany of issues for those expecting to get into the legal marijuana business from complicating everyday transactions to setting them up as targets for crime So where will a company’s money go if weed is legalized in Ohio? The answer is hazy at best. “For banks asking the question about whether they should get involved with marijuana-related See POT, page 22
Steris CEO Walt Rosebrough briefly took the stand at a federal hearing held to determine whether Steris’ effort to buy Synergy Health caused Synergy to call off its U.S. expansion plans — plans that could hurt Steris’ product sterilization business. Rosebrough said he didn’t know about Synergy’s plan to build several U.S. plants that would use a new sterilization technology based on X-rays. Why not? Synergy doesn’t generate much revenue from that technology today, he noted. Plus, “we were told to avoid any conversation that could be seen as anticompetitive,” he said. — Chuck Soder If the answer is “no,” he won’t. In that case, the massive deal — which would give Steris a bigger global footprint and a lower British tax rate — would most likely go through. The case could go all the way to the Supreme Court, he said. It’s not your standard antitrust case: For the most part, Steris and Synergy operate in different parts of the world. So they aren’t major competitors — today. Polster, however, believes that case law gives the FTC the right to stop deals that would prevent future competition. He might not be the final word, however: If he blocks the deal, the case would go to an FTC trial in October. If Steris and Synergy lose, they could appeal. See STERIS, page 23
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Haverfield LLP attorney Kevin Murphy. Murphy, who provides legal counsel to the businessman, said the individual prefers to remain unidentified. “All his accounts got flagged,” Murphy said. “Think about all the transactions that are set up on a wire. All that stuff had to be recreated after 40 years. It’s definitely not easy when your bank cuts you off like that.” If marijuana is legalized in Ohio, which could happen this fall through Issue 3, those issues will become even more common here — unless federal laws are changed. Federally insured banks generally won’t knowingly accept money
One question could determine whether Steris is able to close the biggest deal in its history — and become a British corporation in the process. A few months after the Mentorbased company announced that it would buy Synergy Health for $1.9 billion, Synergy canceled an aggressive expansion plan — a plan that involved stealing customers from Steris and other sterilization service providers. One Synergy executive sent emails to colleagues suggesting that they might have to alter the plan to avoid competing with Steris. And he later suggested that the company pull the plug on the plan, citing a prolonged antitrust inquiry launched by the Federal Trade Commission. But that doesn’t mean that the FTC will win the lawsuit it filed to block the deal. Several Synergy executives defended their actions last week during a three-day-long hearing at the Carl B. Stokes U.S. Court House in downtown Cleveland. They claim that Synergy was going to cancel the plan anyway, for financial reasons. So now U.S. District Court Judge Dan Aaron Polster has just one question to answer: Is it likely that Synergy would move ahead with the plan, if it weren’t for the merger? If the answer is “yes,” then Polster will issue an injunction that would temporarily block Steris from buying Synergy.
CEO: I DIDN’T KNOW
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