Crain's Detroit Business, Feb. 29, 2016 issue by Crain's Detroit Business

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After a winding road to development, work expected to start on new downtown building, PAGE 3 FEBRUARY 29-MARCH 6, 2016

Were pension fund warnings missed? By Robert Snell rsnell@crain.com

Mayor Mike Duggan’s revelation that the city faces a $491 million pension fund shortfall shocked legal experts and city officials who thought Detroit had left budgetbusting problems behind in bankruptcy court. Interviews and court records, however, offer insight into what might have caused a half billion-dollar threat to Detroit’s budget and reveal missed warning signs during the frantic pace of the largest municipal bankruptcy case in U.S. history. Duggan said the $491 million shortfall is not yet a crisis for Detroit, which shed about $7 billion in debt during the bankruptcy. That’s because the city has a projected $30 million surplus this fiscal year — money that will be used in the short term to help fill the pension gap. But the shortfall has emerged during a national economic recovery that may be peaking and amid

signs of revitalization in Detroit. A recession or poor market performance by the city’s two pension funds could even mean Detroit would be forced to pay more than $491 million starting in 2024. “If there is a change in the market ... going forward, it could have an impact on how large the deficit is in 2024,” Detroit’s CFO John Hill said. The city’s bankruptcy plan, finalized in 2014, always prescribed a balloon payment in eight years. That payment was expected to be $111 million. The city’s bankruptcy plan calculated the payment after projecting the life expectancy of city retirees based on old mortality tables, from the year 2000, according to the De troit Financial Review Commission. “They assumed people were not going to live as long as they would,” Duggan said during the Feb. 23 State of the City address. Duggan did not identify which SEE PENSIONS, PAGE 24

Who gave what? Crain’s searched federal records to find out who some of the state’s business and government leaders have backed for president. The results reflect a sampling of $2,700 individual contributions. More donors on Page 25.

Michigan donors gave more than $5 million to candidates through January, months before the March 8 primary.

Dan Gilbert

Richard DeVos Sr.

$500,000 + $750,000 America Leads, pro-Chris Christie super PAC

$250,000 Right to Rise USA, pro-Jeb Bush super PAC

$100,000 New Day for America, pro-John Kasich super PAC

$250,000 Conservative Solutions, pro-Marco Rubio super PAC

All Candidates Republicans Democrats Clinton (D) Bush (R)* Carson (R) Rubio (R) Cruz (R) Sanders (D) Kasich (R)

$5,411,523 $3,689,330 $1,718,804 $1,174,906 $998,093 $862,147 $618,459 $508,109 $504,517 $235,787

Paul (R)* Fiorina (R)* O’Malley (D)* Trump (R) Christie (R)* Graham (R)* Jindal (R)* Huckabee (R)* Santorum (R)* Pataki (R)*

$198,289 $101,639 $31,131 $27,067 $24,075 $21,635 $11,300 $8,179 $2,367 $500

* Suspended their campaigns

Tom Gores

Peter Karmanos Jr.

Roger Penske

David Cotton

$2,700 Hillary Clinton

$2,700 Marco Rubio

$2,700 Jeb Bush

$2,700 John Kasich

Old money, new direction State’s major givers target candidates in changing presidential field By Lindsay VanHulle Crain’s Detroit Business/Bridge Magazine

2015 M&A — a huge deal We’ve been tracking big deals for years. And 2015 was the biggest.

Crain’s found 138 deals in Michigan last year worth at least $10 million, and those deals added up to $101.5 billion. That figure was buoyed by the biggest deal in Michigan history — Dow Chemical Co.’s $65.6 billion merger with fellow chemical competitor DuPont. But the rest of the deals were frequent — and diverse. Food, technology, health care, automotive — all are highlighted beginning on Page 9.

LANSING — Michigan loves Jeb Bush. Until recently, the former Florida governor was the top fundraiser of all presidential candidates in the state, regardless of political party, according to campaign finance records released by the Federal Election Commission. But Bush, trailing in early primaries, suspended his campaign more than a week ago after results were tallied in South Carolina, despite raising and spending millions in his bid to be third in his family to win the White House. And in January, Democratic candidate Hillary Clinton surpassed him as Michigan’s overall fundraising leader. Which raises the question: Who will Bush’s biggest Michigan supporters — with names like

DeVos, Meijer, Schuette and Schostak — back now? “With him getting out, it just kind of shows that there are a lot of different people who are important players in GOP politics up for grabs,” said Craig Mauger, executive director of the Michigan Campaign Finance Network. “It’s almost like they’re trying to put their chips on different people,” said Mauger, adding that U.S. Sen. Marco Rubio of Florida and Ohio Gov. John Kasich could be likely contenders. Some backers, indeed, have donated to several candidates in hopes that one will emerge as the candidate in a large Republican primary. The billionaire DeVos family of West Michigan, long influential in Republican politics, has chosen to endorse Rubio now that the field has narSEE DONORS, PAGE 25

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MICHIGAN

BRIEFS Senators reach deal on Flint water crisis,but vote delayed Senators from both parties in Washington reached a tentative $220 million deal to address the water crisis in Flint and allow a long-stalled energy bill to move forward, although presidential candidate Ted Cruz and other Republican senators initially held up the legislation last week, The Associated Press reported. A proposal by Sen. Debbie Stabenow, D-Mich., and Sen. James Inhofe, R-Okla., would authorize $100 million in emergency aid to fix and replace Flint’s lead-contaminated pipes and $70 million in loans to improve its water infrastructure. The deal also authorizes $50 million nationwide to bolster lead-prevention programs and improve children’s health. Cruz at first objected to a quick vote, delaying Senate consideration, but he later removed the hold placed on the bill. In related news, Democratic lawmakers from Flint and Detroit said they have proposed restoring environmental oversight commissions

that they think could have helped prevent the public health crisis in Flint, AP reported. Sponsors of a bill package that would restore commissions to oversee the Department of Environmental Quality said during a news conference that the commissions would help curtail future lead-contamination crises.

Report: Solar industry outlook to improve in state A recent solar jobs report says Michigan stands to boost industry employment by 14 percent this year, but those in the sector say the long-term outlook is much more uncertain, Midwest Energy News reported. Smaller, distributed projects have largely fueled Michigan’s solar growth, though analysts project the next wave will come from utilitysale projects. Advocates say the solar industry has been steadily improving, but distributed generation growth could be limited under utility-backed policy changes before the state Legislature. “The installer base is going to be heavily influenced by the return on

payments,” said Dave Hurst, director of market analysis for Detroitbased NextEnergy. “With policy up in the air at the moment, it’s hard to see a strong incentive for investment. These markets don’t like turbulence, and Michigan is certainly setting the stage for turbulence in the next couple of years.” Comprehensive energy proposals in the state House and Senate include changes that would reimburse generators for excess electricity at wholesale, rather than retail, rates. A similar change in Nevada reportedly drove several large installation businesses — and hundreds of jobs — out of the state.

MICH-CELLANEOUS 䡲 Dow Chemical said it will pay $835 million to settle a long-standing class-action lawsuit, after the death of Justice Antonin Scalia decreased its chances of prevailing at the U.S. Supreme Court, AP reported. The Midland-based company was found liable in 2013 by a Kansas jury of allegedly conspiring to fix prices for polyurethane, an industrial chemical used in everything from packaging to car interiors. The judgment dealt with alleged company actions between 2000 and 2003. Dow had petitioned the high court to reconsider the judgment. 䡲 Uber is again facing tough questions about safety after one of its drivers was charged with murder. The fast-growing, San

Francisco-based ride-hailing company defended its screening of drivers, saying it couldn’t have predicted that driver Jason Dalton would engage in the random shootings that left six people dead in Kalamazoo Feb. 20, AP reported. Uber said its safety procedures don’t need to change. But some experts say the company must take a harder look at potential drivers if it wants to convince riders the service is safe, even as they agreed that Dalton wouldn’t have raised red flags because he didn’t have a criminal record. 䡲 The Grand Rapids-Wyoming market ranks No. 16 in a ranking of the “Best & Worst Cities for WomenOwned Businesses” by WalletHub, the Grand Rapids Business Journal reported. The analysts compared the top 100 metro statistical areas in 10 metric areas. Nashville, Tenn., ranked No. 1; Detroit was 46th. 䡲 The state’s Pure Michigan tourism website is getting an overhaul — with help from a Floridabased marketing company. Miles Media Group LLP, based in Sarasota, Fla., won a $389,690 contract to rebuild Michigan.org from the Michi-

INSIDE THIS ISSUE BANKRUPTCIES . . . . . . . . . . . . . . . . . . 7 CALENDAR . . . . . . . . . . . . . . . . . . . . . . 20 CLASSIFIED ADS . . . . . . . . . . . . . . . . 21 DEALS & DETAILS . . . . . . . . . . . . . . . 19 MARY KRAMER . . . . . . . . . . . . . . . . . . . 6 OPINION . . . . . . . . . . . . . . . . . . . . . . . . . . 6 PEOPLE . . . . . . . . . . . . . . . . . . . . . . . . . 20 RUMBLINGS . . . . . . . . . . . . . . . . . . . . . 27 WEEK ON THE WEB . . . . . . . . . . . . . . 27

COMPANY INDEX: SEE PAGE 25 gan Strategic Fund, a division of the Michigan Economic Development Corp.

The one-year contract includes four annual renewal options. 䡲 The historic Capitol Theater in downtown Flint is inching its way toward renovation after getting $5.5 million from the Michigan Strategic Fund, MLive.com reported. The project includes an 1,800-seat theater with 21,000-square feet of office space. The project also will get a $500,000 grant from the Michigan State Housing Development Authority

and an expected $3.7 million federal Historic Tax Equity. 䡲

Correction The story “Acquisitions drive record growth of insurance brokerage Acrisure” on Page 13 of the Feb. 22 issue should have said Acrisure has offices in 11 cities in Michigan, including Caledonia, Grand Rapids, Kalamazoo, East Lansing, Traverse City, Marquette and five in the Detroit area. Incorrect information was provided by the company.

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DMC, WSU med school work to reach new pact By Jay Greene jgreene@crain.com

Contract talks began earlier this month between top officials at Detroit Medical Center and Wayne State University School of Medicine over how to structure a long-term deal between two health organizations that have seen years of tension. If an agreement is reached, Wayne State and DMC could end years of disputes and service elimi-

nations and contribute to the financial turnaround at Wayne State medical school and faculty practice plan. Since 2009, when the current contract was negotiated after former DMC CEO Mike Duggan in 2008 unilaterally stopped making $1.6 million monthly payments to Wayne State, DMC has paid the medical school and faculty group practice an ever-declining amount — $51 mil-

lion in 2015 compared with $68 million in 2009 — for teaching, clinical and administrative services. From 2011 to 2015, Wayne has been paid a collective $48 million less than it expected under the contract by DMC, according to Wayne State officials. The amount has dropped for a number of reasons, say DMC and Wayne. They include DMC assigning

private doctors for follow-up care rather than WSU specialists, DMC paying less per full-time equivalent doctor and DMC paying WSU doctors less for indigent care because Healthy Michigan Medicaid expansion has reduced the ranks of the uninsured. With the contract expiring March 31, DMC and Wayne State want to radically overhaul the often stormy relationship. DMC wants Wayne to

help it become a top 15 academic health system, and Wayne State wants DMC to help it achieve a top 40 medical school ranking. Over the past month, Joe Mullany, CEO of DMC, and David Hefner, new vice president for health affairs of Wayne State, have been meeting once a week to negotiate a long-term deal. “We want more alignment beSee PACT, Page 23

Local roads likely to get first bump in state funds By Lindsay VanHulle Crain’s Detroit Business/Bridge Magazine

fell through. Queen Lillian couldn’t get a construction loan without half of the building preleased due to lending standards. The tenant that originally expected to occupy the medical office building, the Wayne State University Physicians Group, backed out of discussions after finding another site just up Woodward north of Mack Avenue. (That project hasn’t yet begun construction because of the physicians group’s financial woes.) The DMC was also courted to occupy the building. After losing the physicians group, Jackson turned his attention to smaller medical office tenants — the private practices of doctors and dentists, for example. Although he had inter-

LANSING — When the first of Michigan’s new revenue for road projects shows up early in 2017, local roads are likely to benefit most at first. That’s because nearly two-thirds — 61 percent — of the income from increased gas taxes and vehicle registration fees that kick in Jan. 1, 2017, would be distrib- A look at 2017 uted to county road project road agencies, plans, at a cities and villages. glance, In all, Gov. Rick Page 21. Snyder budgeted an extra $533 million for transportation during the 2017 fiscal year that starts Oct. 1. Of that, roughly $465 million will be the result of the new tax and fee revenue collected starting in the second quarter of the next fiscal year, said Ed Timpf, budget officer for the Michigan Department of Transportation. “We’re definitely excited about some of the additional revenue,” said Ed Noyola, deputy director of the County Road Association of Michi gan, which represents road agencies serving the state’s 83 counties. “That takes a big load off of the general fund, for now.” As part of the package Snyder signed in November, the state’s flat 19-cent per-gallon gasoline tax will rise by 7.3 cents in 2017, while Michigan’s 15-cent diesel tax climbs by 11.3 cents. Both will be tied to inflation starting in 2022. Vehicle reg-

See MONDRIAN, Page 22

See ROADS, Page 21

LARRY PEPLIN

Jim Jenkins (left) and Christopher Jackson at the property they intend to develop at Woodward Avenue and Stimson Street.

Building character By Kirk Pinho kpinho@crain.com

After false starts, raised hopes and a U-turn on the road to construction, work on a new mixed-use building downtown Detroit is expected to begin in July. The Mondrian — named after Dutch painter Piet Mondrian, who inspired the De Stijl architecture mode in which the building is designed — is expected to bring up to 108 apartments and 15,000 square feet of retail space to the west side of Woodward Avenue, south of Martin Luther King Jr. Boulevard. It’s been Detroit-based Queen Lillian Development LLC and developer Chris Jackson’s tale of stalled and then restarted development efforts at the 1.6-acre site after finishing Queen Lillian I,

The Mondrian on track after struggles an $18.4 million medical office building a mile away. Yes, development and redevelopment have rebounded in a meaningful way in Midtown and downtown. But even in the improved environment, developers of all sizes must hit the occasional curveball and react to changing market conditions. Planned occupancy of The Mondrian, originally proposed as a complementary 75,000square-foot medical office building within field-goal length of the Detroit Medical Center,

MUST READS OF THE WEEK Empowering workers

Postcards from Motown

Empowerment Plan ramps up jobs training program, looks to raise money, plans expansion to other cities,

20 winning postcards picked for display at Detroit-themed pavilion at international architecture show, Page 27 Full gallery at CrainsDetroit.com.

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Sleeping bag coat maker to scale up worker education, job programs By Sherri Welch swelch@crain.com

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The Empowerment Plan is known for the sleeping bag coats its formerly homeless employees in Detroit sew for others sleeping on streets around the world. By 2020, it’s hoping to be known as much or more for its employment and education program and job placement. The nonprofit has set a goal over the next five years to rotate 600 people through its one- to three-year employment and education program as a steppingstone to other living-wage jobs in the community. To fund the plan, it’s launched a campaign to raise $6 million to $8 million and soon will begin production of a limited-edition coat that will debut in the retail market through online hub Kickstarter during the fourth quarter. Once it’s scaled up the employment and education program in Detroit, it plans to take the model to three other cities by 2020, beginning with Pontiac or Flint and then to cities such as Cleveland, Chicago, New York and San Francisco. “Our focus is (now) on employment, not ... creating more coats,” said founder and CEO Veronika Scott, a College for Creative Studies alumna and metro Detroit native. “The coats are a vehicle to do that, mind you, but they don’t come before people.” The Empowerment Plan will look to hire people who are homeless or served by a housing program and have family depending on them in a bid to help end generational poverty, said Scott, 26, who was named among 40 nonprofit trailblazers across the country highlighted by The Chronicle of Philanthropy in January for crafting new approaches to entrenched problems. She also is a Crain’s 20 in their 20s winner. Many of the people in Detroit shelters were born and raised in the city and don’t have the requisite education or work experience, she said. And they can’t compete for the jobs that are being created. “There is a whole group of people who are getting left behind ... (who) need a steppingstone into this new economy,” Scott said. Since its launch four years ago, The Empowerment Plan has produced about 15,000 sleeping bag coats, Scott said, for people in 30 states, six Canadian provinces, New Zealand, Australia, Switzerland, Sweden, Malaysia and France. As it continues to produce coats for the homeless, it plans to add a new cutting operation, with equipment and training donated by Carhartt Inc. To accommodate the cutting operation and production of a coat for retail sale, the nonprofit is looking in Detroit at two new, light-industrial spaces of about 15,000 square feet. It plans to choose one of the

JOHNSON CONTROLS

Sleeping bag coats are sewn by formerly homeless employees. spaces and move from Corktown creative incubator Ponyride during the third quarter, Scott said.

New employment During the second half of the year, The Empowerment Plan will hire 22 new employees to cut and sew the sleeping bag coats, adding to its current 30. As with existing employees, the new hires will be offered the opportunity to attend two hours of classes during each workday: in financial literacy, professional/leadership development, GED educa-

tion and college education online or at area institutions. The Empowerment Plan about six months ago began offering all but the college education free to employees during paid work hours. That enables more of them to take advantage of it by removing transportation and child care barriers that arise with after-hours and offsite programs, Scott said. Pro-Literacy Detroit , Level One Bank, the Coalition on Temporary Shelter (COTS) and 2-Way Communica tions LLC are providing the educational programs. The Empowerment Plan also gets employee referrals from COTS and taps the Neighborhood Service Organization to help distribute the sleeping bag coats. Three of its employees are using the paid educational time to take onSEE NEXT PAGE

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line college courses or attend class at the University of Phoenix, she said. That college education was something they took the initiative for. “Now ... we’re in the process of setting up a fund to pay for those college courses for individuals who want to take education to the next level,” Scott said. As planned, by 2017 there will be 60 employees in the program at any given time, with about 30 graduating into other, living-wage jobs in the community each year. She said it’s a little scary to add job placement to the things The Empowerment Plan is offering its employees, but the goal is to give them a baseline so they can compete, and give them a living wage of $12-$15 per hour. The model is already working, she said, noting that three of The Empowerment Plan’s former employees moved onto jobs at Quicken Loans Inc. , FCA US LLC (formerly Chrysler Corp.) and a home health care agency last year. Other companies, such as Shinola/Detroit LLC, whose president, Jacques Panis, sits on The Empowerment Plan’s board, have also indicated interest in hiring the nonprofit’s employees, Scott said.

Retail effort A core group of six to 12 of the Detroit-based nonprofit’s seasoned employees will move into the retail coat production. The Empowerment Plan expects to produce and sell 3,500 of the 2016 limited-edition coats beginning in October, initially through Kickstarter and then through its own website, with new, limited editions produced each year for a yet-to-be-determined price. “The product we make serves a critical need in the community, and at the same time it could stand on the shelf of any store and it wouldn’t need the story of who made it to sell it,” Scott said. What The Empowerment Plan is doing is bigger than teaching people how to sew, said Pamela Moore, president and CEO of the Detroit Employment Solutions Corp., a nonprofit workforce development agency for the city. Scott is teaching them how to stand on their own, she said. According to research J.P. Morgan Chase & Co. commissioned from the Corporation for a Skilled Workforce and released in January, there are about 228,500 people unemployed or not participating in the Detroit workforce, Moore said. Those are most likely people who don’t have the technical skills that are needed or employability skills, from filing out an application to conflict resolution and knowing what employees expect on the job, she said. Scott and The Empowerment Plan will give some of those people the tools they need to be independent, Moore said. “Those people are going to be able to buy homes, pay taxes ... put their children in good schools ... and be a benefit to the community.”䡲 Sherri Welch: (313) 446-1694 Twitter: @SherriWelch

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CRAIN’S DETROIT BUSINESS

OPINION State must be open on mental health D

o we trust the state, under fire for the Flint water crisis, to do the right thing when it comes to $2.4 billion in mental health funds? That’s the amount at stake in the current rounds of state budget talks. In recent stories and blogs, our health care reporter, Jay Greene, has navigated conflicting information, confusing language in proposed legislation and — most recently — found some clarity from Lt. Gov. Brian Calley. A budget of $2.4 billion is a lot of money, and the plan to take funds from the public mental health services and create a “carve-in” to steer the money through private HMOs for behavioral health benefits has raised red flags with nonprofit and client advocacy groups. Calley told Crain’s (read Greene’s blog at crainsdetroit.com) the state has agreed to replace confusing boilerplate budget language with a consensus proposal from work groups of stakeholders. Calley insists that using Medicaid HMOs to manage the funds doesn’t mean privatization. That’s debatable. It does appear that slowing down the proposal to get everybody on board is a sign that the Flint crisis has made the administration more open to building consensus. For someone dealing with a mental health issue, or for their families, the prospect of losing a long-term relationship with a trusted provider or simply having to navigate a new claims system could be overwhelming. No matter what is ultimately decided, the debate around this issue needs to be transparent and include all those involved, from consumers to mental health organizations.

City faces questions on pensions Last week, Detroit Mayor Mike Duggan shed some light on a city pension liability concern that’s been brewing for some time. In November, after using new actuarials to project the city’s future pension costs from retirees, Duggan said it’s now clear the city faces an additional $491 million in liability starting in 2024. It is mind-boggling to learn that outof-date mortality tables were used to estimate how the liability would grow over time. The bottom line, as reported in Robert Snell’s Page 1 story, is that annual payments starting in eight years will expand to $194.4 million a year. The pension shortfall shows how even after the bankruptcy exit, financial stability in Detroit isn’t actually a known quantity. Will the city need another “grand bargain” in the years ahead? As now-retired U.S. Bankruptcy Judge Steven Rhodes warned during Crain’s 2015 Newsmaker event, cities need to consider switching to 401(k)-style defined contribution plans in order to grapple with mounting liabilities. Did Detroit miss the boat? And what happens next? These are big questions for the mayor, and other local municipalities.

LETTERS

Blame politicians, not bankers, for housing mess Editor: In a Feb. 8 Crain’s Detroit Business column, Publisher Mary Kramer advocated seeing the movie “The Big Short” to better understand the mortgage meltdown of 2008. She interviewed a prominent Detroit attorney who said, “Banks were making risky big bets with all of our money” and “lots of people just don’t understand this stuff.” Kramer added that “the movie’s cynical ending questions why nothing has happened to Wall Street to prevent another meltdown.” Similarly, Greta Van Susteren recently on her Fox News show lamented that no bankers have gone to jail for their role in the meltdown. These are common — but ill-founded — accusations and laments. Some of us really do understand “this stuff.” There were a lot of participants in this fiasco, and the socalled “bankers” are far down on the list. The Democrats in Congress had been pushing affordable housing at least since the late 1990s. In the early, 2000s, CEOs at big commercial banks were hauled before congressional committees and threatened with jail if they did not increase mortgages to subprime borrowers so that low-income homeownership statistics could be improved. Much of this subprime lending was made, insured by and/or endorsed by the Federal Housing Administration and its subsidiaries, Fannie Mae and Freddie Mac, thereby giving the widely perceived federal government guarantee for these mortgages. The Wall Street Journal, among others, warned often, beginning around 2002, that these government-supported programs were privatizing profits and socializing losses. The Bush administration went to Capitol Hill 17 times trying to get legislation to correct this. U.S. Rep. Barney Frank, D-Mass., blocked such efforts, famously saying that he would rather “roll the dice” than cut back on affordable housing programs. He rolled the dice; the country lost. So the “banks” promoted these

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subprime loans to avoid the government pitchforks. Of course, if you offer a subprime borrower a good deal, you have to offer at least as good a deal to a more qualified borrower. If not, you are guilty of discrimination. With the Fed setting interest rates artificially low, investors and their advisers were looking for better yields and found them in CMOs (collateralized mortgage obligations), which were created by investment banks working with mortgage banks. But how do subprime mortgages, when combined by the thousands into a new security, suddenly become AAA-rated? That is the question for the three credit-rating agencies that the federal government sanctioned. Now the buyers of many of these CMOs were sophisticated buyers, i.e. large financial institutions. They should have looked beyond the credit rating at the quality of the underlying mortgages. But why bother when the mortgages are guaranteed, substantially and implicitly, by Uncle Sam? Independent auditors of any financial organization buying these collateralized subprime obligations should have looked past the credit rating and demanded increased reserves or qualified their opinions on the financial statements of these organizations — but it did not happen. Brokers were promoting these securities as “safe as cash,” and library districts in Australia (just to give a wacky example) and all sorts of other naive investors worldwide were piling into these investments, with no clue as to the risk they were taking. The more the naive demanded these securities, the more were cranked out.

While many people expected the housing bubble to burst, few foresaw the contagion. As the financial system locked up, the powers-thatbe insisted that all assets be “marked-to-market.” That made the meltdown much worse. The other major decision by the powers-that-be that exacerbated the crisis was the requirement that underwater mortgages could not be refinanced to lower interest rates and longer terms. After all, the mortgage was underwater. The banks and the borrowers would both have been a lot better off, but federal lending requirements prohibited such common sense. And to answer the question: Why haven’t any “bankers” gone to jail? Actually, some “bankers” have been fined and sent to jail. I put “bankers” in quotes because it is wrong to vilify all people in the banking industry. There are retail bankers, commercial bankers, mortgage bankers, investment bankers, community bankers, etc. Then investment advisers, investment brokers and mortgage brokers are often thought of as in this mix as well. If the prosecutors could have made a case against anyone, they would have. So, yes, some people don’t understand “this stuff” — and those who don’t and publish their misunderstandings anyway, whether in print or film, can hide behind the First Amendment and freedom of the press. Anyone seriously trying to understand the issue could read arguments on both sides before drawing conclusions. But the worst part? The powersthat-be are at it again. Even after Dodd-Frank and the Consumer Finance Protection Bureau, even after the $140B+ required to sustain Freddie and Fannie, the Democrats in Congress are back pushing affordable housing. Dodd-Frank and the CFPB raise the cost of doing business and drive business offshore. But they will do nothing to prevent the next meltdown. Ed Clarke Ann Arbor

Crime Stoppers gained respect by focusing on the right thing: Customers Who are your customers? At Crain’s Detroit Business, “Readers first” has been the mantra since company founder G.D. Crain set that as a foundational principle. It seems to have served us pretty well. Today, our publication’s audience includes 26,000 print subscribers and 230,000 registered website users. About 5,000 people attend Crain’s events each year. The second most important customer? The folks who buy advertising or use marketing plans that use print and digital advertising and event sponsorships. But without an engaged audience, those customers would almost certainly look somewhere else. No matter the organization type, there are always key cus-

MARY KRAMER: Publisher tomers to keep front and center in your priority setting. Identifying the right customer was paramount to John Broad when he became CEO and president of Crime Stoppers of Michigan , which makes cash awards to anonymous tipsters whose information leads to convictions in

crimes. Broad retired recently after an 11-year run. Broad was an early adopter of the career path that leads for-profit executives to nonprofit leadership. He used to own and operate a steel company but became passionate about public safety while helping to create the forerunner to Crime Stoppers — the Alliance for a Safer Greater Detroit. The group spun out of work within the Detroit Regional Chamber. The alliance supported a multiagency task force to catch fugitives, started a college program for at-risk kids and created the freeway courtesy patrol for stranded motorists on Detroit highways, now run by Michigan Department of Transportation. As the new CEO, Broad asked:

who are Crime Stoppers’ customers? The victims? Their families? Law enforcement who rely on the tips? He credits his business background for helping to identify the real customer — the tipster. “The important thing was to get the trust of the community. We guarantee their call will be anonymous,” Broad said. “People are fearful of potential retaliation. We need to get their trust. If the tipster doesn’t have a good experience, they won’t come back.” And in fact, serial tipsters have offered help in solving ever-moreserious crimes. Tips to the nonprofit rose from 1,000 in 2004 to about 7,000 tips a year, which Broad said is the sec-

ond-highest tip rate among Crime Stoppers units in the U.S. Many of these thousands of tips ultimately led to convictions — earning Broad some local notoriety. Broad said that he was in a car wash recently and an employee walked up to him and said: “I heard you had retired. Good luck.” Broad said: “I don’t know if he was a family member or a tipster.” Either way, I think he was a customer. Mary Kramer is publisher of Crain’s Detroit Business. Catch her take on business news at 6:10 a.m. Mondays on the Paul W. Smith show on WJR AM 760 and in her blog at www.crainsdetroit.com.

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Level One may consider IPO after growth to $1 billion level By Tom Henderson thenderson@crain.com

Now that Farmington Hillsbased Level One Bancorp Inc. has become a billion-dollar bank, it is time to consider an initial public offering, says President and CEO Patrick Fehring. A deal Level One announced in October to buy Farmington Hillsbased Bank of Michigan was scheduled to close on Monday, and would push Level One past the $1 billion threshold. Level One was one of a handful of community banks that launched in 2007, all of them with aspirations of going public sooner rather than later as a way of returning profits to original investors. But well before they got to the IPO stage, the Great Recession hit. One that launched within a few weeks of Level One was Troy-based First Michigan Bank , later renamed Talmer Bank and Trust, which had its IPO in 2014. According to filings with the Federal Deposit Insurance Corp., as of Dec. 31, the Bank of Michigan had $111 million in assets and Level One Bank had $923.5 million in assets. After Monday’s closing, Level One will have more than $1 billion in assets. “In our industry, from a size perspective, that takes us to the next level, to the next bracket of peers, so that’s exciting,” said Fehring. “Once you get to that size, the question about whether to do an IPO starts being asked,” he said. “We’ve created good value for our shareholders, but at some point you need to look for liquidity, and an IPO could be part of that strategy. It will be something for the board to decide.” Another bank that launched in 2007, Novi-based Lotus Bancorp Inc., was bought by Level One last February. Previously, it bought the assets of two financially troubled banks, Michigan Heritage Bank in 2009 and Paramount Bank in 2010. Both were based in Farmington Hills. Talmer built its assets based through a series of acquisitions, beginning in 2010, of the assets of troubled banks shut down by federal and state regulators, including Community Central Bank of Mt. Clemens, Peoples State Bank of Madison Heights and Citizens First Bank in Port Huron. Fehring said that pending any decision about an IPO — there is no timing, yet, to proceed — Level One will continue to grow organically

and through possible acquisitions. From the end of the third quarter to the end of 2015, the bank grew its assets by about $23 million. Fehring said two major bank acquisitions announced in January also present an opportunity for Level One to add customers and assets. On Jan. 26, Midland-based Chemical Financial Corp. announced it was purchasing Talmer for $1.1 billion, and Columbus, Ohio-based Hunt ington Bancshares Inc. announced it was buying Akron, Ohio-based FirstMerit Corp. for $3.4 billion. Talmer and Chemical have very

“From a size perspective, (the billion dollar level) takes us to the next level, to the next bracket of peers. ... Once you get to that size, the question about ... an IPO starts being asked.” Patrick Fehring,Level One Bancorp

little overlap, with only five or six branch closings expected. But there is substantial overlap with Huntington and FirstMerit, and numerous

branches, yet to be determined, will be closed. “Changes in the local banking environment will present good op-

portunities for us to capture market share,” said Fehring. Bank of Michigan, despite the name, had just one branch. Monday’s closing gives Level One 11 branches. In October, it opened its first branch in Detroit, in the Julian Madison Building at 1420 Washington Blvd. The closing had been contingent on approval by Bank of Michigan’s shareholders, the Federal Reserve Bank of Chicago, the Michigan Depart ment of Insurance and Financial Ser vices and the FDIC. 䡲 Tom Henderson: (313) 446-0337 Twitter: @TomHenderson2

You do business where we do business. We should meet. At Huntington we believe that a stronger business community makes the whole community stronger. That’s why we work so hard to truly understand your business goals, and to deliver the insights that can get you there. We’re proud of the place we call home, and together we can make it even better.

BANKRUPTCIES The following business filed for protection in U.S. Bankruptcy Court in Detroit Feb. 19-25 . Under Chapter 11, a company files for reorganization. Burst Sound & Lighting Systems L.L.C., 6774 Brandt St., Romulus, vol-

untary Chapter 11. Assets: $763,434.51; liabilities: $467,834.65. Mike Lewis

Member FDIC. A ® and Huntington® are federally registered service marks of Huntington Bancshares Incorporated. Huntington® Welcome.TM is a service mark of Huntington Bancshares Incorporated. © 2015 Huntington Bancshares Incorporated.

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M&A Experience

CDB promotes Matt Langan to ad director

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A longtime Crain’s Detroit Business advertising account executive has been named advertising director of the publication. Langan, 54, has been with Crain’s since 1988 and was promoted from senior account executive. Langan is a graduate of State Matt Langan: Has Wayne University and been with Crain’s is a retired since 1988. military intelligence captain in the U.S. Army Reserves. “It says a lot about an organization when it can — and does — promote from within,” Crain’s Group Publisher Mary Kramer said. “Matt has been an informal leader for years, helping to train and orient new account executives. Our portfolio of opportunities — print, digital, event sponsorships and custom projects — continues to grow, and Matt will ensure we are working collaboratively with clients to help them reach their marketing goals.”

Nominees sought for 20 in their 20s It’s that time of year — time to nominate a 20-something professional who is making his or her mark in metro Detroit. This program recognizes the hard work of local rising stars while also giving them the opportunity to further propel their careers. Employers, take note: This is your chance to boast about internal talent. Candidates for Crain’s 20 in their 20s include up-and-comers making waves within a company, men and women who have shown success or originality as entrepreneurs, or those who have made an impact in civic or community leadership roles. Winners will be profiled in Crain’s. Nominees must be 29 or younger before June 1. Nominations are due Feb. 29. To fill out the form, visit crainsdetroit.com/nominate. Read about last year’s 20 in their 20s class at crainsdetroit.com/20. Questions? Contact Crain’s Assistant Managing Editor Kristin Bull at kbull@crain.com or (313) 446-1608, or Special Projects Coordinator Keenan Covington at kcovington@crain.com or (313) 446-0417.

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SPECIAL REPORT: FINANCE

2015 sets local M&A records; 2016 looks to be strong, too By Tom Henderson thenderson@crain.com

Michael DuBay, the group practice leader for private equity for the Detroit-based law firm of Honigman Miller Schwartz and Cohn LLP , thought things couldn’t get any better in the world of M&A than they were in 2014. And then 2015 got even better. Crain’s tallied 138 deals in Michigan last year with a minimum deal value of $10 million, for a total of $101.6 billion. Both numbers are records since Crain’s started running its list of big deals more than two decades ago “It was clearly an amazing year,” said Rajesh Kothari, managing director of Southfield-based Cascade Partners LLC , an investment banking and private investment firm. The previous record for deals was 114 in 2014, and the previous dollar record of $80.9 billion was set in 2009, an anomaly since all but $4.3 billion of that total was tied to bankruptcy or government bailouts of the auto industry. Of course, one could argue that the dollar volume last year was a bit anomalous, too, because it involved the whopping $65.6 billion, headlinemaking deal involving Dow Chemical and DuPont. Honigman set a record, too, advising on 107

Top 5 deals overall Acquirer/Acquiree/Value 1) Dow Chemical Co./ DuPont Co., $65.6 billion 2) Olin Corp./Blue Cube Spinco Inc., $5 billion 3) Dow Chemical Co./Dow Corning Corp., $4.8 billion 4) Equate Petrochemical Co./MEGlobal BV, $3.2 billion 5) XPO Logistics Inc./Con-way Inc., $3.02 billion All 138 biggest deals, pages 15-18 For a searchable database of the deals, see crainsdetroit.com/bigdeals

transactions nationally last year, up from 103 deals the year before. Dollar volume for both years was about $8 billion. And despite recent market turmoil, concerns about China and expected increases in interest rates later this year by the Federal Reserve , DuBay thinks 2016 will be another strong year.

“A general theme for our clients is, ‘If it’s not bolted down, it’s a good time to sell,’ ” he said. In fact, he and other local experts in M&A say that, counterintuitive as it might seem, market turmoil and concerns about China could make deals easier to get done. They expect a trend that started in the fourth quarter to continue throughout 2016 — banks worried about national and world economic conditions got more conservative with their commercial lending, which brought deal multiples down from record highs and started to lower seller expectations. Lower deal multiples — of EBIDTA (earnings before interest, depreciation, taxes and amortization) to sale price — and lower expectations should mean another strong year in 2016. “We’re seeing our pipeline filling up rapidly, because deals are a little cheaper to do,” said DuBay. “Valuations had got a bit out of control, but there was some pullback in the fourth quarter,” said Kothari. “There’s been some tempering of enthusiasm, but the market is enthusiastic, nonetheless.” “The balloons have come off the ceiling on valuations. They’re coming down and we’ll continue to SEE DEALS, PAGE 10

Health care deals, Page 11 | Food deals, Page 12 | Tech and auto deals, Page 13 138 Biggest Deals of 2015, Pages 15-18

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BIGGEST DEALS OF 2015

DEALS

5 years of big deals

FROM PAGE 9

Year

No. of deals Volume

2015

138

$101.6 billion

2014

114

$43.7 billion

2013

102

$44.8 billion

2012

$27.5 billion

2011

$19.3 billion

see them come down,â&#x20AC;? said Scott Eisenberg, managing partner in the Birmingham-based investment banking firm Amherst Partners LLC. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;ve been telling people, â&#x20AC;&#x2DC;If youâ&#x20AC;&#x2122;re on the fence now, get off it. You canâ&#x20AC;&#x2122;t wait.â&#x20AC;&#x2122; I sent an email out yesterday to a prospect who was saying he wanted to wait until spring to sell. I told him, â&#x20AC;&#x2DC;You might want to go now,â&#x20AC;&#x2122; â&#x20AC;? he said. â&#x20AC;&#x153;Last year was a frothy year,â&#x20AC;? said Kevin Prokop, managing partner at Detroit-based Rockbridge Growth Equity LLC . â&#x20AC;&#x153;There was a lot of private equity money looking to be deployed. There was bank debt. And strategic buyers had a lot of money on their balance sheets. â&#x20AC;&#x153;This year will still be strong, but buyers will be more selective. The market is going to be more binary,â&#x20AC;? he said. â&#x20AC;&#x153;Good deals will have no trouble getting done. More questionable deals will have trouble getting funded.â&#x20AC;? Kevin Marsh, managing director at the Birmingham-based Angle Advisorsâ&#x20AC;&#x201C;Investment Banking LLC, said a decrease in the availability of debt will, somewhat counterintuitively, drive deal-making. â&#x20AC;&#x153;Historically, itâ&#x20AC;&#x2122;s still a very good market. With multiples coming down, you can expect a surge in pri-

vate equity capital being deployed,â&#x20AC;? he said. Marsh said the strength of the U.S. economy relative to Europe, coupled with market turmoil in China, has made U.S. companies attractive targets for foreign buyers, with Chinese companies looking for key technologies and European companies looking for a toehold in what they view as a safe place to invest. Munich-based Blue Corporate Fi nance was looking for more than a foothold in the U.S. market when it and Birmingham-based Quarton Partners LLC formed a Swiss-based holding company in December, Q u a r t o n I n t e r n a t i o n a l A G , to help them source deals and share in the investment banking fees involved. Andre Augier, Quartonâ&#x20AC;&#x2122;s cofounder and chairman and CEO of North American operations for the new holding company, said Blue Corporate Finance was eager to be more active in the hot North Ameri-

can M&A market despite a strengthening dollar that means it takes more euros to get deals done. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s counterintuitive with the dollar coming close to parity with the euro. Youâ&#x20AC;&#x2122;d think youâ&#x20AC;&#x2122;d see a cooling of interest by Europeans in investing here, but there is a flight to safety. They have more interest in investing in the U.S.,â&#x20AC;? he said.

A public company operating as a PE firm Sam Valenti III, the executive chairman of Bloomfield Hills-based Horizon Global Corp. (NYSE: HZN), expects lower deal multiples to help Horizon belatedly close on some acquisitions this year. When Horizon was spun off from Bloomfield Hills-based TriMas Corp. last July, Valenti said the company would basically operate as a private equity firm that trades as a public company, with an aggressive acquisition plan both here and in China and South America. Horizon Global has two business units, Cequent Americas and Cequent Asia Pacific, Europe and Africa , and the two dominate the towing, trailer and cargo management industries, operating under such brand names as Draw-Tite , Bulldog , Reese , Fulton and Hayman Reese. Valenti and CEO Mark Zeffiro said at the time of the IPO that the company would look to buy small

Michael DuBay: â&#x20AC;&#x153;Deals are a little cheaper to do.â&#x20AC;?

Sam Valenti III: â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;m looking at many prospects.â&#x20AC;?

manufacturers as well as carve-outs from larger companies looking to generate cash and hoped to close on its first acquisition in the third or fourth quarter. But Valenti said a disconnect between sellersâ&#x20AC;&#x2122; expectations and his kept any deals from getting done. He said sellers expected high prices for much of last year for good reasons â&#x20AC;&#x201D; interest rates were at record lows; slow organic growth for companies in general meant that if they wanted to grow their top lines they had to do so through acquisitions; and banks were eager to lend. But with Fed rates heading up and banks more conservative, Valenti expects to finally get some deals done. â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;m looking at many prospects as we speak,â&#x20AC;? he said. Detroit-based Huron Capital Part ners LLC , annually the stateâ&#x20AC;&#x2122;s most active private equity firm, had an-

other record year in 2015, with 25 transactions, including 19 acquisitions in 13 states. In December alone, Huron sold two companies and added three new companies to serve as platforms for further acquisitions. Managing partner Brian Demkowicz said the sudden drop in the availability of bank credit and declines in corporate earnings could make deals easier to do this year. â&#x20AC;&#x153;You saw deals falling apart in the fourth quarter and valuations coming down,â&#x20AC;? he said. â&#x20AC;&#x153;It felt to us in October like it did in the fall of 2007. Valuations were at an all-time high, well in excess of where they should have been from an economic point of view. Economic growth had been anemic, at 1 to 2 percent.â&#x20AC;? Demkowicz said more rational pricing will keep Huron active this year. He said the firm has letters of intent on five deals, two of them to serve as platform companies and three to be add-ons for current platforms. He expects deal flow to be strong later in the year, thanks to a lag between seller expectations and market realities. â&#x20AC;&#x153;It can take a couple of quarters for sellers to adjust,â&#x20AC;? he said. äĄ˛ Tom Henderson: (313) 446-0337 Twitter: @TomHenderson2

Your deal gets done here

Apple Sauce, Inc.

Sale of 10 Applebeeâ&#x20AC;&#x2122;s restaurants to Doherty Apple South Florida, LLC

Sale of 33 Applebeeâ&#x20AC;&#x2122;s restaurants to RMH Franchise Corporation

Sale to Aurora Diagnostics, LLC

Cottonwood Acquisitions, LLC Acquisition of assets of Roadie Products, Inc.

Sale of stock to Hynes Holding Company

Acquisition of certain assets of Hospitality Technical Services that made DCI an Enhanced GPNS Provider to Marriott International

Acquisition of dESCO, LLC

MCM Capital Partners III, L.P. Offering of Limited Partnership Units

$70 million Senior Guaranteed Notes

Sale to CeramTec

Industrial Maintenance Services, Inc. Sale to Technology Service Professionals, Inc.

Lee Steel Corporation and its affiliates Sale of Wyoming, Michigan facilities and business to Union Partners I, LLC pursuant to Bankruptcy Code Â§ 363

Lee Steel Corporation and its affiliates Sale of Romulus industrial real estate and facilities to Hilco Industrial and Hilco Real Estate

LTS Metrology LLC Acquisition of substantially all the assets of LTS Scale Company, LLC

S. G. Morris Represented independent trustee in the sale to Applied Industrial Technologies

Tioga Air Heaters, LLC Acquisition of Reliable Construction Heaters, Inc.

Tioga Air Heaters, LLC Acquisition of Mobile Air

Recapitalization with two private equity firms

McDonald Hopkins PLC 39533 Woodward Avenue, Suite 318 Bloomfield Hills, MI 48304

+BNFT + #PVUSPVT ** Detroit Managing Member

248.646.5070 mcdonaldhopkins.com $IJDBHP t $MFWFMBOE t $PMVNCVT t %FUSPJU t .JBNJ t 8FTU 1BMN #FBDI t 8BTIJOHUPO % $ * McDonald Hopkins Government Strategies LLC is owned by the law firm McDonald Hopkins LLC. McDonald Hopkins Government Strategies is not a law firm and does not provide legal services.

Carl J. Grassi President

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BIGGEST DEALS OF 2015

Cardinal finds alignment with $1.12B Harvard Drug buy After nine years under private equity firm ownership, Livonia-based Harvard Drug Group LLC last year sold its business to Cardinal Health Inc. in a $1.12 billion transaction. For Dublin, Ohiobased Cardinal, Harvard was the sixth generic drug company it has purchased since 2006. Cardinal also has acquired Metro Medical Supply Co., DIK Drug Co. and Kinray Inc. in the past five years. For Harvard, the 49-year-old company is now part of a major health care distributor with a major warehouse in Midtown instead of being owned the past decade by two out-of-state private equity firms. In 2010, Court Square Capital Part ners of New York acquired Harvard Drug, which had been owned by another private equity firm, Miamibased H.I.G. Capital since 2006. Harvard began operations as an independent, family-owned pharmacy in 1967 as Great Lakes Wholesale Drug. In 2014, Harvard Drug had revenue of $450 million with 450 employees in two distribution facilities. Cardinal officials declined to provide Harvard sales figures for 2015. Colleen Greiner, Cardinal Health’s vice president of sales, said Harvard perfectly aligned with Cardinal’s growth strategy in generics.

Crainsdetroit.com/blogs TWEET @Crainsdetroit

“Since the acquisition, we have been trending well with the culture and the business and have had tremendous results,” said Greiner, adding that the two companies are still in the process of integration operations and sharing best practices with Harvard. For example, Harvard has helped to expand Cardinal’s portfolio of over-the counter pharmaceutical products and specialized packaging offer-

ings to serve hospital systems and other companies. The law firm Jones Day advised Cardinal Health on the deal, while Harvard Drug Group was advised by Dechert LLP . Credit Suisse Group AG served as Harvard Drug Group’s financial adviser. Cardinal Health is a $103-billiona-year supply business that also helps health care clients reduce costs, enhance efficiency and improve quality. Last year, Cardinal opened a distribution warehouse in Detroit near Henry Ford Hospital.

1) Cardinal Health Inc./Harvard Drug Group LLC, $1.12 billion 2) Diplomat Pharmacy Inc./Biorx LLC, $315 million 3) Henry Ford Health System/Allegiance Health, $293 million 4) Ascension Health/Crittenton Hospital Medical Center, $225 million 5) Villa Healthcare Management Inc./Bortz Health Care Facilities Inc., $114 million

Jay Greene

These are but a few of the major deals that the law firm of Dykema helped its clients close in 2015. From middle-market businesses to publicly traded institutions, privately held enterprises to large-scale public financings, clients nationwide look to Dykema for sophisticated counsel, top-tier representation and customized solutions. When you consider your next transaction, choose Dykema.

Perceptron, Inc.

Paqui LLC

Johnson Oil Company

Acquisition of Coord3 Industries s.r.l. and Next Metrology Software s.r.o.

Sale to Amplify Snack Brands, Inc. $12,000,000

Sale of Assets to F.S. Holdings, Inc. and Circle K Stores Inc.

February 2015

April 2015

June, December 2015

Research Data Analysis, Inc.

Southern Minnesota Energy Cooperative

July 2015

Acquisition of Alliant Energy assets in Minnesota and various asset sales to its members $120,000,000 July, December 2015

Crittenton Hospital Medical Center

HealthPlus of Michigan, Inc. & HealthPlus Partners, Inc.

Transfer via Member Substitution to Ascension Health

Sale of assets of Medicaid and MIChild businesses to Molina Healthcare of Michigan, Inc.

September 2015

Big bucks,

Auto-Owners Insurance Group Acquisition of Strickland Insurance Group

Michigan State Building Authority 2015 Revenue and Revenue Refunding Bonds $989,340,000 July 2015

FMP SA Management Group Sale of Buffalo Wild Wings franchises $160,000,000

August 2015

Michigan Finance Authority

Celonova Biosciences, Inc.

City of Detroit Financial Recovery Income Tax Revenue and Refunding Local Project Bonds

Sale of interventional radiology business to Boston Scientific Corporation

$245,000,000

$270,000,000

September 2015

December 2015

Exceptional service. Dykema delivers.

HIGH TECH Tom covers banking, finance, technology and biotechnology.

Acquirer/Acquiree/Value

In 2010, Harvard Drug ran afoul of the U.S. Drug Enforcement Administration over sale of controlled substances. The DEA had suspended Harvard’s registration to sell Schedule III, IV and V controlled substances, including OxyContin. In 2011, Harvard was fined $8 million for the infractions. Other drug companies were also ordered to improve oversight of distribution of controlled substances to prevent drug diversions, including Cardinal Health.䡲

When Companies Turn to Dealmaking, They Turn to Dykema

Stock sale to an affiliate of Paris-headquartered Ipsos, S.A.

with Tom Henderson

Top 5 health care deals

Cooper-Standard Automotive Inc.

Detroit Water and Sewerage Department

Sale of Cooper-Standard Rockford, Inc.

Revenue and Revenue Refunding Bonds, Series 2015

December 2015

$324,325,000

www.dykema.com

December 2015

TWEET @TOMHENDERSON2

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BIGGEST DEALS OF 2015

Fresh food trend feeds Flatout deal

CONGRATULATIONS Honigman congratulates Crain’s Biggest Deals Zinners anG ȴnalists anG o΍ers our Eest ZisKes to all oI tKis \earȇs Konorees 200+ Honigman SroYiGeG counsel on more tKan corSorate transactions tKat closeG in

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Columbus, Ohio-based Lancaster Colony Corp. had met the founders of Saline-based Flatout Holdings long before its purchase of the company nearly a year ago. “We were familiar with the business and had developed a little bit of a relationship through our business development efforts with the owners,” said Dale Ganobsik, director of investor relations and corporate planning. Lancaster looked at Flatout in the mid-2000s and knew the owners, Michael and Stacey Marsh, prior to private equity firm North Castle Partners LLC taking a position in it in 2010, he said. As Crain’s reported at the time, Greenwich, Conn.-based North Castle and Glencoe Capital Michigan LLC acquired a majority interest that year in the maker of flatbread and other specialty food items for $53.3 million. When North Castle and Mike and Stacy Marsh put the business up for sale in 2014, their financial adviser, Chicago-based Lincoln International, approached Lancaster’s subsidiary, T. Marzetti Co., among others about purchasing the company. The deal happened fairly quickly, Ganobsik said, with Lancaster pur-

Experience. Relationships. Success.

Top 5 food deals Acquirer/Acquiree/Value 1) Campbell Soup Co./Garden Fresh Salsa Co Inc., $231 million 2) Lancaster Colony Corp./Flatout Holdings Inc., $92 million 3) Kroger Co./Seven metro Detroit Hiller’s Markets locations, $60 million 4) Diversified Restaurant Holdings Inc./18 St. Louis-area Buffalo Wild Wings restaurants, $54 million 5) Lipari Foods LLC/Clover Mountain Foods LLC, $16 million

chasing Flatout last March for $92 million. Flatout expanded T. Marzetti’s presence in the deli department, he said, noting the perimeter of the store is a growing area for most retail grocers today. The impetus was similar to that of Campbell Soup Co. in its blockbuster deal to buy Ferndalebased Garden Fresh Salsa Co. Inc. “Fresh food is the more popular thing right now with consumers. Increasing health-consciousness is feeding that,” Ganobsik said. 䡲 Sherri Welch

www.pmcf.com

DETROIT | CHICAGO

Industrials: Phil Gilbert 248.223.3326 phil.gilbert@pmcf.com Joe Wagner 248.603.5254 joe.wagner@pmcf.com Plastics & Packaging: John Hart 248.223.3468 john.hart@pmcf.com Retail, Technology & Business Services: Matt Jamison 248.223.3368 matt.jamison@pmcf.com Medical Technology: Bryan Hughes 248.223.3678 bryan.hughes@pmcf.com P&M Corporate Finance, LLC (“PMCF”) completed transactions valued at over $2.5 billion in the previous ﬁve years across its dedicated industry teams. These successes serve as examples of PMCF’s focus on helping business owners plan and execute winning transactions globally. With 22 professionals in the United States and over 200 professionals in 27 countries through its Corporate Finance International™ group, PMCF combines its experience and relationships to drive optimal results for clients.

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BIGGEST DEALS OF 2015

Rizvi Traverse turns focus to 3-D with RealD buy for $537.8M Timing is everything, as RealD found out in November when Birmingham-based Rizvi Traverse Man agement LLC agreed to pay $537.8 million, including the assumption of debt, for the struggling 3-D technology company, a deal that worked out to about $11 a share. The deal came a year after Beverly Hills, Calif.-based RealD rejected an unsolicited offer of $600 million from the activist hedge fund Starboard Value LP, and nine months after RealD management decided it wanted to sell the company, after all, and began shopping it around. RealD’s investment banker reportedly reached out to 71 would-be buyers, and 36 signed confidentiality agreements. Despite RealD’s presence in more than 27,000 theaters worldwide, only five prospective buyers had enough follow-up interest to receive a formal management presentation. Of those, Rizvi Traverse had the sole bid in the final round. RealD’s board unanimously approved. According to a filing RealD made with the U.S. Securities and Exchange Commission after the deal was announced, interest by others was cooled by “perceived risks around consumer appetite for 3-D films” and fears that theaters might not renew deals to license RealD technology. John Giampetroni, a Rizvi Traverse co-founder and partner, was named by Crain’s as one of its 10 Newsmakers of the Year for 2013. Though based in the Midwest, Rizvi Traverse is a powerhouse in digital media and entertainment. A hybrid of venture capitalist and private equity firm, the company was the largest investor in Twitter before its initial public offering. It was an early investor in Square, a popular mobile-payment platform; the social-media company Snapchat ; and SpaceX , the rocket and spacecraft company founded by Elon Musk. 䡲 Tom Henderson

Top 5 tech deals

Remy deal helps BorgWarner drive toward revenue growth BorgWarner Inc. CEO James Verrier made a bold promise in 2013 to double the company’s revenue to $15 billion by 2020. Despite above-market growth, the drivetrain component supplier needed to make a big play as it manufactures combustion-engine products in an increasingly electric world. After a three-month courtship, BorgWarner announced in July 2015 that it would acquire electric motors manufacturer Remy Interna tional Inc. in a $1.2 billion deal. Auburn Hills-based BorgWarner initially offered $29 share for Remy

along with a provision that Remy not seek other bidders, the Indianapolis Business Journal reported. The boards of the suppliers settled on $29.50 per share, a 44 percent premium over Remy’s share price at that time. BorgWarner targeted Remy to build on the companies’ joint developments, Verrier told Crain’s at the North American International Auto Show in January. Remy gave BorgWarner access to electrification technologies it didn’t have in its portfolio and a mainline to the engineering talent it needed to compete in that space, he said. The result is a bigger and better

Top 5 automotive deals Acquirer/Acquiree/Value 1) Bain Capital/TI Automotive, $2.4 billion 2) Delphi Automotive plc/HellermannTyton Group plc, $1.58 billion 3) BorgWarner Inc./Remy International Inc., $1.2 billion 4) General Motors Co./GMAC-SAIC Automotive Finance Co. Ltd., $1 billion 5) Koch Industries Inc./Truck-Lite Co. Ltd., $1 billion

BorgWarner, which had revenue of $8.3 billion in 2014, and now has content in electric vehicles such as the Chevy Volt. “The vehicle of the future (elec-

tric) is changing the landscape,” Verrier told Crain’s. “We’re not relying on vast volume growth. Our growth will come from penetration gains.”䡲 Dustin Walsh

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CRAIN'S LIST: LARGEST MERGERS & ACQUISITIONS OF 2015 Rank

Pending

The two chenical conglomerates are expected to merge $65,600.0 B as equals pending regulatory approvals.

Dow Chemical Co., Midland

DuPont Co., Wilmington, Del.

Weil Gotshal; Simpson Thacher

Evercore Partners; Goldman Sachs

Olin Corp., Clayton, Mo.

Blue Cube Spinco Inc., Midland

JP Morgan

Barclays; Goldman Sachs Oct. 31, 2015

3 4 5 6 7

Dow Chemical Co., Midland

Dow Corning Corp., Midland Sherman Sterling

BorgWarner Inc., Auburn Hills

Cardinal Health Inc., Dublin, Ohio

Equate Petrochemical Co. KSCC, MEGlobal BV, Dubai, United Latham & Watkins Kuwait Arab Emirates Wachtell Lipton; Davis XPO Logistics Inc., Greenwich, Con-way Inc., Ann Arbor Polk Conn. Goldman, Sachs & Co.; UBS Securities LLC

J.P. Morgan Securities; Pending KPMG AG; Kirkland & Ellis Ernst & Young Dec. 23, 2015

Dow sold its chlorine business to Olin for $2 billion in cash, a debt swap and 50.5 percent of Olin stock worth $2.2 billion. Dow acquired the remaining 50 percent of the joint venture from Corning Inc. Dow sold MEGlobal as part of its strategy to reduce its stake in several Kuwaiti ventures.

White & Case; Citi; Sidley Oct. 30, Austin 2015

The Deal makes XPO the second largest less-thantruckload shipper in North America.

$3,016.1

Weil, Gotshal & Manges LLP

June 30, 2015

Sold by consortium of hedge funds, including Oaktree and Duquesne Capital Management.

$2,400.0 C

$5,000.0

$4,800.0 $3,200.0

Bain Capital LLC, Boston

TI Automotive Ltd., Auburn Hills

Delphi Automotive plc, Troy

HellermannTyton Group plc, Barclays; Linkaters LLP Crowley, England Bank of America Merrill Remy International Inc., Lynch; KeyBanc Capital Pendleton, Ind. Markets Dechert LLP, Jones Day Harvard Drug Group LLC, Livonia

Goldman Sachs; J.P. Morgan

Dec. 18, 2015

HellermannTyton and its 3,800 employees will be part of $1,580.0 Delphi's electronics division based in Shanghai.

Gibson Dunn; UBS Securities; Sullivan & Cromwell Credit Suisse; Piper

Nov. 10, 2015

BorgWarner paid $29.50 per share, more than 40 percent premium over Remy's trading price.

July 6, 2015 Sold by Court Square Capital Partners LP

$1,115.0

Sullivan Cromwell

Jan. 5, 2015 Had been owned by Ally Financial Inc., Detroit

$1,000.0

Dec. 31, 2015

$1,000.0

General Motors Co., Detroit

GMAC-SAIC Automotive Finance Co. Ltd., Pudong New Area, China

10 12 13 14 15

Koch Industries Inc., Wichita, Kan. Mahle GmbH, Stuttgart, Germany

Robert W. Baird; Wells Truck-Lite Co. Ltd., Falconer, Jones Day; Latham & Watkins Fargo N.Y. Citigroup Capital Markets Barclays Thermal unit of Delphi Inc. Automotive plc, Troy

Tyler Technologies Inc., Plano, Texas

New World Systems Corp., Troy

Wells Fargo

The Gores Group

U.S. Farathane Holdings Corp., Auburn Hills

Weil Gotshal

Aviation Industry Corp. of China, Henniges Automotive Beijing Holdings Inc., Auburn Hills

Miller, Canfield, Paddock Morgan Stanley; UBS and Stone PLC

Rizvi Traverse Management LLC, RealD Inc., Beverly Hills, Birmingham Calif.

Latham & Watkins

Mann Hummel Holding GmbH, Ludwigsburg, Germany

Proquest LLC, Ann Arbor

Huntington Bancshares Inc., Columbus, Ohio

Fosun International Ltd

Meadowbrook Insurance Group Inc.

THK Co Ltd, Tokyo, Japan

ZF TRW, Livonia, linkage and Fasken Martineau, Hengeler Mueller, Mori suspension business in Hamada & Matsumoto Europe, NA

22 23

Plastipak Holdings Inc., Plymouth

APPE packaging division of La Seda de Barcelona Group

Diplomat Pharmacy Inc., Flint

Biorx LLC, Cincinnati

Gryphon Investors, San Francisco

Jensen Hughes Inc., Arbutus, Kirkland & Ellis Md.

25 26 27 28

ITT Corp., White Plains, N.Y.

Wolverine Automotive Holdings Inc., Dearborn

Henry Ford Health System, Detroit

Allegiance Health, Jackson

Strength Capital Partners, Birmingham

30 31

Davies Ward/Manatt Automotive filters unit, Affinia Group Holdings, Ann Phelps Arbor Fried, Frank, Harris, Ex Libris, Jerusalem, Israel Shriver & Jacobson LLP Guggenheim Securities; Macquarie Equipment Wachtell Lipton Rose & Finance Inc., Bloomfield Katz Hills DLA Piper LLP, Paul Chen

Koch acquired the automotive aftermarket lighting manufacturer from Penske Corp.

July 1, 2015 The Delphi unit reported $1.2 billion in revenue with more than 7,600 employees.

$727.0

Honigman Miller Schwartz and Cohn

Nov. 16, 2015

Tyler acquired New World Systems for $360 million in cash and approximately 2.1 million shares.

$713.9

Angle Advisors

Jan. 31, 2015

U.S. Farathane issued $470 million in debt to finance its $700.0 own acquisition to Gores. Deal value from Moody's.

Sept. 9, 2015

Sold by Littlejohn & Co. LLC.

$600.0

Moelis & Co.; Cooley LLP; Pending Freshfields; Wachtell Lipton Robert W. Baird; Hogan Pending Lovells; McCarthy Tetraul

RealD Inc. developed RealD 3-D technology, used for projecting films using circularly polarized light.

$537.8

German supplier Mann Hummel also assumed the unit's debt burden as part of the deal.

$513.1

Jefferies LLC

Oct. 6, 2015 April 1, 2015

Provider of cloud-based and other IT services for libraries had been owned by Golden Gate Capital. Had been owned by Australian company.

$500.0

July 10, 2015

Fosun paid $8.65 per share for Meadowbrook, which at the time of the deal was more than 20 percent over its trading price. TRW Holdings sold the unit, with $550 million in revenue, to THK ahead of its own acquisition by ZF Friedrichshafen AG.

$433.0

KPMG; Mayer Brown

Sidley Austin LLP, Brian Fahrney; Willis Capital Markets, Matt Morris BNP Paribas; Honigman Miller Schwartz and Cohn

Sept. 1, 2015

Forest Partners, Estrada & July 7, 2015 APPE is Wales operation of liquidated La Seda Associaados Bass Berry & Sim

Hughes Hubbard & Reed

$1,195.7

Choate Hall Stewart Honigman Miller Schwartz and Cohn; Crowe Horwath UBS; Foley & Lardner

April 1, 2015 Dec. 31, 2015 Oct. 5, 2015

$457.8

$400.0

$386.2

Deal includes $210 million in cash and $105 million in $315.0 Diplomat common stock. Fire protection and engineering company had been a $300.0+ D portfolio company of Huron Capital, Detroit. Value is greater than $300 million. Had been owned by Wynnchurch Capital, Rosemont, Ill. $300.0 $293.0 D

Pending

Allegiance is a 480-bed community-owned health system, including Foote Hospital in Jackson.

UHY; Maddin Hauser

June 29, 2015

The acquisition gave Campbell Fresh division entree to $231.0 the deli section of grocery stores.

Crittenton Hospital Medical Hall, Render, Killian, Health & Lyman Center, Rochester Hills Jaffe Raitt Heuer & Weiss Arch Global Precision, PC Livonia

Dykema Gossett PLLC

Oct. 1, 2015

Charter NEX Films, Milton, Wis.

Optimum Plastics, Bloomer, Hogan Lovells Wis.

Honigman Miller Schwartz and Cohn

Dec. 31, 2015

Thor Industries, Elkhart, Ind.

Postle Aluminum Co., Elkhart, Ind.

Jaffe Raitt Heuer & Weiss PC

May 1, 2015

Strength Capital of Birmingham sold its stake in Postle.

$145.9

Impellam Group plc, UK

Bartech Holding Corp., Bartech Group Inc.

Dec. 9, 2015

Deal was combination of cash and debt.

$120.0

Robert Bosch North America Corp., Farmington Hills

Climatec LLC, Phoenix, Ariz. Dorsey & Whitney

Sverica Capital Management LLC; SunTrust Robinson Humphrey; Foley & Lardner LLP William Blair; Kirkland & Ellis

Jan. 15, 2015

Climatec, formerly owned by Pegasus Capital Advisors LP, generated revenue of $190 million in 2014.

$120.0 D

Campbell Soup Co., Camden, N.J. Garden Fresh Salsa Co Inc., Ferndale Ascension Health, Warren (Ascension Health, St. Louis)

32 32

Morgan Lewis

Nelson Mullins

Aug. 7, 2015

$225.0 D Recapitalization of supplier of machined aluminum, $171.6 with previous investors, including Strength, getting a return. Blown-film manufacturer had been a portfolio company $150.0+ D of Huron Capital. Value is greater than $150 million.

Source: Company submissions, Crain's research and Bloomberg News. Many transactions had multiple sources of information. In some cases, more than one estimated value of a transaction exists. In those cases, Crain's has chosen the value it believes to be most accurate. The list does not include all 2015 transactions, only those valued at $10 million or more.

B The total deal value represents half the value of both companies to show one company is effectively absorbing the other. C Bloomberg estimate. D Crain's estimate.

LIST RESEARCHED BY CRAIN'S STAFF

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CRAIN'S LIST: LARGEST MERGERS & ACQUISITIONS OF 2015

FROM PREVIOUS PAGE Rank

Mueller Industries Inc., Memphis, Tenn.; Atlas Holdings LLC, Greenwich, Conn.

Tecumseh Products Co., Ann Willkie Farr Arbor

Villa Healthcare Management Inc., Skokie, Ill.

Bortz Health Care Facilities Inc., Warren

Hexpool AB, Sweden

Rhetech Inc., Whitmore Lake

Dwyer Group Inc, Waco, Texas

Service Brands International Inc., Ann Arbor

Delphi Automotive plc, Troy

39 40

Control-Tec LLC, Allen Park KPMG Corporate Finance; Greenwich Capital Group PineBridge Structured Capital Proper Group International McGladrey LLP Partners, New York City Inc., Warren Mel Morris, English entrepreneur Derby County Football Club Geldards LLP Ltd., Derby, England

Citigroup; Honigman Miller; J.H. Cohn

Sept. 22, 2015

The deal included more than $93 million cash and assumed debt.

$119.6

July 1, 2015 Deal value is estimated based on comparable deals.

$114.0 B

Honigman Miller Schwartz and Cohn

Jan. 16, 2015

$112.0

Jones Day

June 30, 2015

Rhetech, which manufacturers resins and additives for thermoplastics, had roughly $117 million in 2013 revenue.

$110.0 B

Dec. 31, 2015

Control-Tec captures vehicle data and analytics to support product development.

$105.0

UHY Corporate Finance; Howard & Howard PLLC

Oct. 15, 2015

The deal includes a recapitalization and a minority interest sale to the private equity firm.

$102.0

Jaffe Raitt Heuer & Weiss PC; Flint Bishop LLP; Smith Cooper Ltd. BR Partners; Barbosa Mussnich

Sept. 3, 2015

The English soccer club was sold by a group of investors $100.0 B led by Andy Appleby, owner of Rochester-based General Sports & Entertainment LLC. Pellegrino acquired shock absorber factory in Sao Paulo. $92.3 Distributors â&#x20AC;&#x201D; Auto Norte, Cobra and Distribuidora Automotiva â&#x20AC;&#x201D; acquired the industrial business.

Oct. 1, 2015

Three different buyers

Affinia Automotiva Ltda, Osasco, Sao Paulo, Brazil; unit of Affinia Group Holdings, Ann Arbor

42 43 43

Lancaster Colony Corp., Columbus, Ohio

Flatout Holdings Inc., Saline Lincoln International LLC

Dyson James Ltd., Malmesbury, England

Sakti3 Inc., Ann Arbor

Meredith Corp., Des Moines, Iowa

API Technologies Corp., Orlando, Aeroflex/Inmet Inc., Ann Fla. Arbor; Aeroflex/Weinschel Inc., Frederick, Md.

47 48 48 50 50 52 53

Northeast Industries Group Co. Ltd., China

None Reception systems unit of Delphi Automotive plc, Troy

Kroger Co., Cincinnati

Seven metro Detroit Hiller's Markets locations

July 1, 2015 Kroger gained market share through the deal and entrĂŠe $60.0 B to specialty and ethnic food products.

U.S. Farathane Holdings Corp., Auburn Hills

Tepso Plastics Mex SA de CV, Apodaca, Mexico

Pending

U.S. Farathane sought an additional $110 million in debt $60.0 to suppot the transaction.

Centene Corp., St. Louis

Fidelis SecureCare of Michigan Inc., Livonia

May 31, 2015

Sold by Concerto Healthcare Inc., Detroit. Centene acquired the 32 percent stake it didn't already own.

$57.0

Watermill Group LLC, Lexington, Quality Metalcraft Inc., Mass. Livonia

Lincoln International LLC Mar. 13, 2015 Oct. 19, 2015

Goodwin Procter

Quarton International; Clarkson Law pllc

Wilson Sonsini

June 8, 2015 Angle Advisors

$92.0

Acquisition of lithium-ion battery company follows an investment of $20 million led by Dyson

$90.0 $90.0 B

June 30, 2015 Feb. 28, 2015

Shape Magazine, Troy

Lancaster's wholly-owned subsidiary, T. Marzetti Co., acquired Flatout from North Castle Partners LLC.

July 31, 2015

Had been owned by New York-based American Media $87.4 Inc. Deal included Shape, Natural Health, and Fit Pregnancy magazines and their related digital assets. Had been owned by Cobham PLC, Wimborne, England $80.0

The Delphi unit manufactures automotive antennas and $70.0 in-vehicle TV tuners.

Heartland Payment Systems Inc., Payroll 1 Inc., Birmingham Princeton, N.J.

Preston Todd Advisors

March 2, 2015

Payroll1 provides payroll and tax-filing services for businesses.

$57.0 B

Magellan Health Inc., Avon, Conn.

4D Pharmacy Management Systems Inc., Troy

Weil Gotshal

April 1, 2015

The deal also includes consideration for $30 million more based on future milestones.

$55.0

Diversified Restaurant Holdings Inc., Southfield

18 St. Louis-area Buffalo Wild Wings restaurants

July 1, 2015 Sold by A Sure Wing LLC, Creve Coeur, Mo.

Dykema Gossett PLLC, Detroit

Cox Smith Matthews Inc., San Antonio, Tex.

May 1, 2015

Huron Capital Partners, Detroit

Earnest Brothers Logistics, Chicago

ProQuest LLC, Ann Arbor

Coutts Information Services Fried, Frank, Harris, Shriver & Jacobson LLP Ltd., Blashford, England

June 1, 2015

57 57 59 60 61

Ascension Health, St. Louis

U.S. Health & Life Insurance Dykema Gossett PPLC Co. Inc., Birmingham Fenwick & West LLamasoft Inc., Ann Arbor

June 30, 2015

Company with broad base of print and digital books and $50.0+ B materials was bought from Tennessee-based Ingram Content Group. U.S. Health operates in 20 states, including Michigan, $50.0 Ohio, Illinois and Indiana.

Sept. 29, 2015

Investment was largest VC round in an IT company in state history. Llamasoft makes supply-chain software

$50.0

Chinese company plans to acquire a 35 percent stake.

$48.7

Goldman Sachs Group Inc., New York City

68 69

DLA Piper

Dec. 1, 2015

NYX Inc., Livonia

Pending

TransForce Inc., St. Laurent, Quebec

Hazen Final Mile, Taylor

May 22, 2015

118 Cox Smith attorneys in San Antonio, McAllen and El $53.0 Paso, Texas, as well as in Austin and Dallas, where Dykema already has an office, join the Detroit firm. Logistics company was bought to form a platform for $50.0+ B future acquisitions. Value is greater than $50 million.

$41.0 B $40.0 B

BGC Partners Inc., New York City Computerized Facility Integration LLC, Southfield

May 30, 2015

CFI rolled into BGC's Newmark Grubb Knight Frank service portfolio.

Various investmemt firms

Delphinus Medical Technologies Inc., Plymouth

Sept. 10, 2015

CNL Healthcare Properties Inc., Orlando, Fla.

Novi Orthopaedic Center, Novi

Feb. 26, 2015

Follow-on investment. Largest in state history for a $39.5 medical device company. Company, spun off from Karmanos Cancer Institute, uses ultrasound to detect breast cancer. Sold by St. John Providence Health System, Warren, and $30.5 other minority owners.

Opus Group AB, Molndal, Sweden

Drew Technologies Inc., Ann Vinge Advokatfirman; Ellis and Winters LLP Arbor

March 23, $25 million in cash and $5 million to the sellers. 2015

$30.0

Various investment firms

Duo Security Inc., Ann Arbor

April 14, 2015

$30.0

Truck Hero Inc., Ann Arbor

N-Fab Inc., Houston

Various investment firms

Summit Sports Inc., Bloomfield Hills

United States Steel Corp., Pittsburgh

Double Eagle Steel Coating Co., Dearborn

June 1, 2015

Masco Corp., Taylor

Endless Pools Inc., Aston, Pa. Paul Hastings

Feb. 27, 2015

Gunderson Dettmer

64 66 67

Vedder Price

Shanghai Shenda Co Ltd., Shanghai, China

62 63 64

Dykema Gossett; Plante Moran

$54.0

B Crain's estimate.

Forbes MA Group

Dec. 1, 2015 June 30, 2015

Duo makes two-factor security for IT networks, has 6,000 customers in 80 countries, including Facebook, Twitter, NASA and, after its debacle with hackers last year, Sony. N-Fab manufactures nerf bars, pre-runners and other off-road vehicle accessories. The investment firms acquired a majority share.

$28.0 $27.0 B

U.S. Steel acquired outstanding stake in joint venture $25.2 held by competitor AK Steel. AK Steel took over the stake after acquiring the Dearborn operations from Severstal in 2013. Endless Pools becomes part of Watkins Manufacturing $25.0 Corp., a Masco subsidiary in California.

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CRAIN'S LIST: LARGEST MERGERS & ACQUISITIONS OF 2015

FROM PREVIOUS PAGE Rank

Wellington Management Group LLP, Trinity Health Corp.

Sharecare Inc., Atlanta

April 8, 2015

Boston-based Wellington invested $20 million, and $25.0 Livonia-based Trinity $5 million, in wellness and healthassesment company founded by WebMD founder Jeff Arnold and TV personality Dr. Mehmet Oz.

Civitas Solutions Inc., Boston

Cassell & Associates LLC, Novi

Jan. 13, 2015

$24.3

NHN Investment Corp., Intel Avegant Corp., Ann Arbor Capital Corp. (Fund: Intel Capital Connected Car Fund)

73 74 74 76 77 77 79

Union Partners I LLC, Oak Brook, Ill.

Wyoming, Mich., operations Stahl, Cowen, Crowley, Addis of Lee Steel, Novi

M Holland Co., Northbrook, Ill.

Polymer Z LLC, Birmingham

Rentokil Initial PLC, West Sussex, Pest control assets of Eradico Internal England Services Inc., Novi Shareholders, United Truckload Services Inc., Warren

Universal Truckload Services Inc., Warren

Crowne Group LLC, Cleveland

Vari-Form, Troy

Ipsos, Paris, France

Research Data Analysis Inc., Bloomfield Hills

Power Solutions International Inc., Wood Dale, Ill.

Powertrain Integration LLC, Madison Heights

Huron Consulting; McDonald Hopkins PLC

Tullius Co. Inc., Foley & Mansfield PLLP

Aug. 21, 2015

Avegant, which makes virtual reality goggles, moved to Redwood City, Calif., after this deal.

$24.0

Sept. 18, 2015

Assets acquired out of Chapter 11 bankruptcy in an auction.

$23.6

Pending

Deal value is estimated based on comparable deals and $23.0 Polymer Z's 2014 revenue of roughly $29 million. Eradico Services retains a lawn care and seasonal $23.0 Christmas decorations business after sale.

Mar. 3, 2015 July 8, 2015

Jones Day

Lincoln International LLC July 15, 2015 DeSilva & Phillips; July 15, Dykema; Gordon Advisors 2015

$22.5 Had been owned by Sun Capital Partners Inc.

$22.0 B

Research data generated revenue of about $25 million in $22.0 B 2014 and employs 180 in 60 countries.

June 30, 2015

The purchase price consists of $21.6 million in cash and $21.6 contingent consideration of $8 million more in cash.

Luna Innovations Inc., Roanoke, Advanced Photonix Inc., Ann Cooley LLP Va. Arbor

May 11, 2015

$21.0

Oxford Instruments PLC, Tubney Medical Imaging Resources Woods, London Inc., Ann Arbor

May 1, 2015

Advanced Photonix was a pubicly traded maker of optoelectronic sensors, devices, and test and measurement instrumentation. Deal involves $10.4 million in cash and a $10.1 million earn-out payment in 2016.

AGM Automotive Inc., Troy

Austria-based Cross Industries AG sold Durmont to AGM and its investment partner Dallas-based Trive Capital.

$20.3

Huron Capital Partners, Detroit

Honigman Miller Erin Engineering and Research Inc., Walnut Creek, Schwartz and Cohn; Plante Moran Calif.

LLamasoft Inc., Ann Arbor

Donnelly Penman & Durmont Teppichbodenfabrik GmbH, Partners Austria Honigman, BDO Drake Automotive Group, Henderson, Nev.

April 10, 2015

$20.5

May 1, 2015

Aftermarket parts company for muscle car and Mustang $20.0+ B enthusiasts was bought as platform company to grow through acquisitions. Merged acquired company into portfolio company $20.0+ B Jensen Hughes, Baltimore, Md.

Barloworld, South Africa's supply chain software

Nov. 3, 2015

Deal adds 100 employees for Llamasoft with purchase of $20.0+ B South African business unit.

LLamasoft Inc., Ann Arbor

LogicTools supply chain applications business of IBM Corp.

April 1, 2015

Deal adds 120 employees and such customers as Apple, $20.0+ B Microsoft, Rubbermaid and Shell.

Investors, including James Dyson, GM Ventures, Beringea LLC, Itochu Ventures, Khosla Ventures

Sakti3 Inc., Ann Arbor

Mar. 15, 2015

VC deal to ramp up production of maker of solid-state batteries for household applicances.

Beringea LLC, Farmington Hills

D3O Labs Ltd., England

Incipio Technologies Inc., Irvine, ClamCase LLC, Grosse Calif. Pointe Farms

Wunderlich

Pure HealthyBack Inc., Orlando, Dynamic Rehabilitation, Fla. Troy

Marco Eadie; Polsinelli Roetzel & Andress

Level One Bancorp Inc.

Bank of Michigan, Farmington Hills

Nelson, Mullins, Riley & Scarborough; FinPro Capital Advisors Inc.

92 92 94

Lipari Foods LLC, Warren

Clover Mountain Foods LLC

Park Lawn Corp., Toronto

Midwest Memorial Group LLC, Beverly Hills

Hilco Global, Northbrook, Ill.

Romulus operations of Lee Steel, Novi

Penske Corp., Detroit

Transfreight North America, Erlanger, Ky.

Meritor Inc., Troy

Morganton, N.C., assets of Sypris Solutions, Louisville, Ky.

Perceptron Inc., Plymouth

Coord 3 Industries Srl, Bruzolo, Italy

Dykema Gossett PLLC

98 99 99 99 99

Saga Communications Inc., Grosse Pointe Farms

WLVQ-FM, Columbus, Ohio

Bergner & Co.

Dandong Xintai Electric Co Ltd., Dangdong City, China

Coherix Inc., Ann Arbor

HCI Equity Partners LLC, Washington, D.C.

Tribar Manufacturing LLC, Howell

Mojix Inc., Los Angeles

Tierconnect Inc., Plymouth

Ntvb Media Inc., Troy

TV Guide Magazine, New York City

Unique Fabricating Inc., Auburn Great Lakes Foam Hills Technologies Inc., Concord, Mich.

Vast LLC, Auburn Hills

B Crain's estimate.

Minda Valeo Security Systems Pvt. Ltd., India

Pepper Hamilton

Sheppard, Mullin, Richter Dec. 1, & Hampton 2015 Reed Smith

PricewaterhouseCoopers April 7, 2015 Bodman PLC, UHY June 5, Advisors LLP, Black Steel 2015 Partners Warner Norcross & Judd March 11, LLP 2015

Beringea invested $13 million to lead round in company $19.0 that makes shock-absorbing clothing materials. Maker of keyboards that attach to iPad, and other $17.0 electronic devices.

Howard & Howard

Pending

Bank of Michigan had one branch and $110 million in assets. This gives Level One about $1 billion in assets.

Jan. 20, 2015 Pending

The deal expanded Lipariâ&#x20AC;&#x2122;s service area by bringing it $16.0 Clover Mountain's six-state distribution area. Midwest Memorial owns and manages 28 cemeteries in $16.0 Michigan.

Huron Consulting; McDonald Hopkins PLC

Sept. 18, 2015

Assets acquired out of Chapter 11 bankruptcy in an auction.

$15.5

Debevoise & Plimpton; Gowling Lafleur Henderson LLP

May 8, 2015

Had been owned by Mitsui & Co. Ltd.

$15.0 B

July 10, 2015

Meritor paid Sypris $14.5 million in cash, some $14.5 equipment, assets and intellectual property, a five-year lease of the property, inventories and accounts receivable, certain accounts payable and liabilities. The deal for the Turin, Italy-based coordinate $13.1 measurement machine maker involves cash and assumption of debt. Had been owned by Wilks Broadcast Group LLC, $13.0 Alpharetta, Ga.

Gianni, Origoni, Grippo, Cappelli & Partners

Feb. 27, 2015 Pending Sept. 10, 2015

Greenberg Traurig

$20.0

Finnea Group

Desilva & Philps

Accelerator Group LLC

$17.0 B

Deal sets up joint venture in China for 3-D machine vision products.

$16.5

$12.0 $12.0 B

March 31, 2015 June 4, 2015 Oct. 7, 2015

Deal included Tierconnect subsidiary CodeRed, also $12.0 B based in Plymouth. Had been owned by OpenGate Capital LLC, Los Angeles $12.0

Sept. 1, 2015

The purchase of the supplier of molded polyurethane components was funded using Uniqueâ&#x20AC;&#x2122;s $19.5 million revolving line of credit.

$12.0

April 30, 2015

Vast, a joint venture between several companies including Grand Rapids-based ADAC Plastics Inc., acquired a 50 percent stake.

$12.0

CONTINUED ON NEXT PAGE

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CRAIN'S LIST: LARGEST MERGERS & ACQUISITIONS OF 2015

FROM PREVIOUS PAGE Rank

105 Bloomfield Hills

BlackEagle Partners LLC,

Temperform Corp., Novi

Honigman Miller Schwartz and Cohn

$11.7

106 LLC, Fort Laramie, Ohio 02 Investment Partners LLC, 107 Bloomfield Hills 123.net Inc., Southfield 107

Majestic Industries Inc., Macomb Township

Bodman PLC; Jan. 1, 2015 Future acquisitions will be rolled into Temperform. Montgomery, Wiethorn & Burke PC May 22, 2015 Ice Miller LLP

$10.0+ B

Tooling Technology Holdings

107

Bankrate Inc., Palm Beach, Fla.

107 Santa Monica, Calif. Confidential buyer 107 Excelsior Capital, Newport 107 Beach, Calif. HCI Equity Partners LLC, 107 Washington, D.C.

Clearlake Capital Group LP,

National Technnologies Inc., Honigman Miller Schwartz and Cohn LLP Oak Creek, Wis.

Value is greater than $10 million.

T2 Communications, Holland, Mich.

May 4, 2015

T2, which operates fiber networks in Grand Rapids area, $10.0+ B was a division of Texas-based CornerWorld Corp.

Quizzle LLC, Detroit

April 1, 2015

Company, launched in 2008 as part of Quicken Loans to $10.0+ provide free credit monitoring and identity protection, will remain in Detroit. CNI now operates under Clearlakes Futuris Global $10.0+ B Holdings automotive unit.

CNI Enterprises Inc., Madison Heights

May 1, 2015

Wall decor manufacturer that was sold had been a porfolio compan of Huron Capital Partners, Detroit.

$10.0+ B

Finnea Group; Greenberg July 25, Traurig LLP 2015

HCI acquired a minoity stake in the steel firm.

$10.0+ B

Culhane Meadows

June 30, 2015

Fire protection engineering and consulting company bought for Jensen Hughes portfolio company.

$10.0+ B

Barrus

Dec. 31, 2015

Reactive chemical coatings company was bought to form a platform company for further acquisitions.

$10.0+ B

Kreis, Enderle, Hudgins & May 1, Borsos 2015

Company was acquired by platform company Xlerate Group, Indianapolis.

$10.0+ B

McCarter & English

March 1, 2015

Energy mangement and building automation company $10.0+ B bought as add-on for Albiero Energy portfolio company.

AirNet Systems Inc., Columbus, Ohio

Aug. 5, 2015

Had been owned by HIG Capital LLC, Miami.

$10.0+ B

I-Deal Optics Holdings Inc., Troy

Sept. 11, 2015

Sold by Hadley Capital LLC.

$10.0+ B

May 19, 2015

Deal was combination of stock, cash and warrants.

$10.0+ B

internal

Sept. 28, 2015

Davis and Torre acquired a majority share in PuroSystems; deal value estimated at over $10 million by industry sources.

$10.0+

Dickinson Wright LLP

Aug. 10, 2015

Mackinaw operates as an independent subsidiary of Meadowbrook.

$10.0+ B

Artissimo Designs, El Segundo, Calif.

107 107

Huron Capital Partners, Detroit

Greater Kalamazoo Auto Auction, Schoolcraft

107

Huron Capital Partners, Detroit

107 107

107

Honigman Miller Schwartz and Cohn; Crowe Horwath Sky Technologies, New York Honigman Miller Schwartz and Cohn; Plante Moran

Waveform Technology LLC, Troy

PuroSystems Inc.; Tamarac, Koro Law, Birmingham; and UHY Advisors Fla. Bodman LLP

MiraMed Global Services LLC, Jackson

Deloitte Financial Services; Honigman Miller Schwartz and Cohn Institut Dr. Erdmann GmbH, Cascade Partners Germany

NSF International, Ann Arbor

Honigman Miller Schwartz and Cohn

UHY Advisors

Mackinaw Administrators LLC, Brighton

Avarent LLC, Libertyville, Ill. Cascade Partners Security Confidence Corp., Cincinnati

Bodman PLC; BDO

Link Tool & Manufacturing Co., Westland

MMWR LLC

$10.0+ B

Jun. 5, 2015

Plexus Management Group Inc., Westwood, Mass.

McCormick & Friman LLP

Fandrich RechtsanwĂ¤lte

Sept. 2, 2015 April 7, 2015

Erdmann laboratory specializes in analytical testing for $10.0+ B the food, water, wastewater, dietary supplement and pharmaceuticals. The acquisition was made through NSF Internationalâ&#x20AC;&#x2122;s $10.0+ B global health sciences division. Nuspire bought 16-person firm specializing in network $10.0+ B security for heal care, IT, energy and financial services. $10.0+ B

Cascade Partners

Penske Automotive Group Inc.,

Freightliner of Knoxville and Internal Freightliner of Chattanooga dealerships

Feb. 1, 2015

Penske estimates the acquisition to generate about $200 $10.0+ B million in annualized revenue.

Penske Automotive Group Inc., Bloomfield Hills

Dealerships Audi Eatontown, Porsche Monmouth, Jaguar Monmouth and Land Rover Monmouth, Monmouth County, N.J.

Nov. 17, 2015

Purchased from Schneider Nelson Auto Group. The franchises are expected annually to sell approximately 2,400 new and used vehicles and generate about $175 million in revenue.

$10.0+ B

Raymond James, Sarasota. Fla.

The Producers Choice LLC, Troy

May 29, 2015

Public company will retain all 60 employees of insurance and annuity marketing firm.

$10.0+ B

Rock Holdings Inc., Bingham Farms

20 percent stake in Rock Ohio Caesars LLC, holding company for Ohio casinos and other assets

Honigman Miller Schwartz and Cohn LLP

Feb. 26, 2015

Deal valued at over $10 million, according to Rock Holdings Inc. Sold by Caesars Entertainment Corp.

$10.0+

July 31, 2015

$10.0+ B

107 Bloomfield Hills

107

Honigman Miller Schwartz and Cohn; Plante Moran Perkins Cole, Crowe Horwath

Meadowbrook Insurance Group

107 NSF International, Ann Arbor Nuspire Corp., Commerce 107 Township PennEngineering & 107 Manufacturing, Danboro, Pa.

107

Bradley Arant Boult Cummings

Commercial Steel Treating Corp., Madison Heights

Valentus Specialty Chemicals, N. Brunswick, N.J.

107 Inc., Southfield

June 15, 2015

$10.0+ B

Huron Capital Partners, Detroit

Mark Davis and Franke Torre,

Finnea Group

March 10, Sold by Bethesda, Md.-based RLJ Lodging Trust. 2015

107

of Troy-based Signal 107 owners Restoration Services.

DLA Piper LLP

Marriott Auburn Hills Pontiac Centerpoint

Nexus Technical Services, Oakbrook Terrace, Ill.

Kalitta Charters LLC, Ypsilanti

$11.0 B

Sept. 30, 2015

Huron Capital Partners, Detroit

107 Main Street Capital Holdings 107 LLC, Pittsburgh, Pa. ManagedWay Co., Southfield 107

107 Birmingham, and other investors Lino Lakes, Minn. Strength Capital Partners,

Street Smart Rental Inc.,

Honigman Miller Schwartz and Cohn

107

U.S. LBM Holdings Inc., Green Bay, Wis.; BlackEagle Partners LLC, Bloomfield Hills

Rosen Materials LLC, Sunrise, Fla.

Honigman Miller Schwartz and Cohn LLP

Inhouse

April 17, 2015

$10.0+ B

107

U.S. LBM Holdings Inc., Green Bay, Wis.; BlackEagle Partners LLC, Bloomfield Hills

Parkers Building Supply, Port Arthur, Texas

Honigman Miller Schwartz and Cohn LLP

Womble Carlyle Sandridge & Rice LLP

Dec. 15, 2015

$10.0+ B

Ube Industries Ltd., Ube, Japan

Advanced Electrolyte Technologies LLC, Troy

Jan. 16, 2015

Compuware Corp., Detroit

ISPW Bechmark Technologies Ltd., Calgary, Alberta

Dec. 31, 2015

Ube bought majority stake in company from Dow $10.0+ B Chemical Co. to advance manufacturing of rechargeable lithium-ioin batteries. Company had been a joint venture with Dow. Company provides source-code management and $10.0 automation for computer mainframes.

Feb. 17, 2015

Company is in hot internet-of-things space, making sensors to monitor pipelines, factory work floors.

$10.0

Nov. 5, 2015

Had been owned by Tegna Inc., McLean, Va.

$10.0 B

107 136

136 Pittsburgh, Pa. Valassis Communications Inc., 136 Livonia Draper Triangle Ventures LP,

B Crain's estimate.

Pixel Velocity Inc., Ann Arbor Spencer Media Inc., Lancaster, Pa.

Daroth Capital

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DEALS & DETAILS CONTRACTS Aqaba Technologies Inc., Sterling

Heights, an internet marketing agency, has been retained by the Big Bad Rack Co., Marysville, a manufacturer of off-course training equipment, to develop an e-commerce solution focusing on brand development, search engine optimization and social media marketing. Websites: aqabatech.com. bigbadrack.com. Michigan Department of Transportation, Lansing, has renamed G2 Consulting Group, Troy, a geotechnical

environmental and construction materials services firm, as part of its pre-approved engineering team through an “as-needed” services contract for Wayne, Oakland and Macomb county projects. Website: g2consultinggroup.com. Alliance Mobile Health, Troy, has signed an agreement with Royal Oak Township to provide 911 ambulance

service. Telephone: (248) 457-0344. Website: alliancemobilehealth.org.

EXPANSIONS Children’s Hospital of Michigan, Detroit, has opened Children’s Hospital of Michigan-Troy, 350 W. Big Beaver

Road, Troy. Telephone: (248) 524-7180. childrensdmc.org.

NEW PRODUCTS

NEW SERVICES

Terumo Cardiovascular Systems Corp.,

Ann Arbor, added Capiox FX Advance Oxygenator to the Capiox Oxygenator portfolio. It replaces the FX15 and FX25 line of oxygenators manufactured in Elkton, Md. Enhancements include improved flow dynamics with an increased blood flow rate and a lower minimum operating level. (734) 663 4145. Website: terumo-cvgroup.com.

Pinkerton Consulting & Investiga tions Inc. , Ann Arbor, a global

risk management agency, has begun offering Pinkerton Insights Intelligence Brief, a daily risk assessment report. The free service is for business leaders interested in staying informed of potential security threats. Telephone: (800) 724-1616. Website: pinkerton.com/ free-report-signup

Duo Security Inc., Ann Arbor, a cloud-based access security provider, announced that its Trusted Access platform now enables organizations to prevent data breaches by mitigating out-of-date and unsecured employee devices — PCs, Macs, tablets, smartphones — that access their networks and let them see which operating systems, browsers, Flash and Java editions are most at risk of causing a data breach. Website: duo.com.

19 Danlaw Inc., Novi, a telematics and engineering services provider, said its Mx-Suite Test Automation Platform now supports Autosar 4.2.x standard (also 3.2, 4.0, 4.1). (248) 476-5571 Web: danlawinc.com.

STARTUPS GreenSpace Café, a plant-based

restaurant and craft cocktail bar, has opened at 215 W. Nine Mile Road, Ferndale. Phone: (248) 2067510. Website: greenspacecafe.com.

Intellectual Property | Litigation | Technology

Transactional experience on par with the major Silicon Valley law firms. – BRAD KANCIGOR, ASSOCIATE GC Synopsys, Inc

YOUNG BASILE. Strategic advisors to the world’s most innovative companies. ANN ARBOR

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Sea Life Michigan Aquarium, Auburn Hills, has added a new exhibit, CLAWS, featuring a variety of crustaceans from around the world. Telephone: (866) 622-0605. Website: visitsealife.com/michigan. Henry Ford Health System, Detroit, announced the opening of the Henry Ford Women’s Heart Center, part of the Edith and Benson Ford Heart & Vascular Center at the William Clay Ford Center for Athletic Medicine, 6525 Second Ave., Detroit. Telephone: (313) 876-4540. Website: henryford.com Hotel Investment Services Inc., Troy, announced the opening of Holdiay Inn Express & Suites-Plymouth, 15100 Beck Road, Plymouth. Telephone: (734) 969-8100. Website: hiscorp.com/managedproperties/holiday-inn-expressplymouth-mi/

Systematic Rebalancing

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Hino Trucks, Novi, a Toyota Group company, Hino’s new California parts distribution and training center, Ontario, Calif. The training facility was designed as an extension of Hino’s national training center in Novi to support a growing dealer network. Telephone: (248) 699 9300. Website: hino.com.

Deals & Details guidelines. Email cdbdepartments@crain.com. Use any Deals & Details item as a model for your release, and look for the appropriate category. Without complete information, your item will not run. Photos are welcome, but we cannot guarantee they will be used.

2 4 8 . 7 3 1 . 9 5 0 0 | W W W . S C H E C H T E R W E A LT H . C O M Investment Advisory Services offered through Schechter Investment Advisors, LLC.

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CALENDAR WEDNESDAY MARCH 2

Autonomous Vehicles: Opportunities and Challenges. 7:30-11 a.m. Au-

tomation Alley. Seminar explores the challenges and opportunities that self-driving cars will pose, including legal, economic growth and policy considerations. Speakers include John Maddox, assistant director of the University of Michigan Mobility Transformation Center and director of collaborative program strategy, UM Transportation Institute; Richard Walawender, corporate group co-leader and director of the international practice and automotive practice groups, Miller Canfield; Tom Kelly, COO and director of entrepreneurship, Automation Alley; Bryce Pilz, clinical assistant profes-

nomic Forum Breakfast. 7:30-10 a.m. March 7. Michigan Hispanic Cham-

sor, UM Law School; and Matt Gibb, deputy Oakland County executive. Automation Alley, Troy. $30; walk-in price: $40. Email: info@automationalley.com. Phone: (800) 4275100.

UPCOMING EVENTS Government Forecast Breakfast. 99:30 a.m. March 7. Birmingham

Bloomfield Chamber of Commerce. Speaker: U.S. Sen. Gary Peters., DMich. The Townsend Hotel, Birmingham. $50, $40 members, $290 corporate table of eight. Contact: Birmingham Bloomfield Chamber of Commerce. Phone: (248) 6441700; email: Chamber130@ bbcc.com 12th annual MHCC Public Policy & Eco -

ber of Commerce. “Strengthening America: Hispanic Opportunity and Impact” to feature speakers Detroit Mayor Mike Duggan and U.S. Sen. Debbie Stabenow, D-Mich. Moderated by Javier Palomarez , president and CEO, U.S. Hispanic Chamber of Commerce. MGM Grand, Detroit. $100. Contact: Barb Lange Phone: (248) 792-2763; email: blange@ mhcc.org; website: mhcc.org JVS Trade Secrets. 6-9:30 p.m. March 9. JVS. Speaker is fashion designer Linda Schlesinger-Wagner, founder of Skinnytees, a company that has grown from selling in a single shop to an $8 million clothing line sold in stores, online and on QVC. Temple Beth El, Bloomfield Hills. $150. Contact: Judy Strongman, phone: (248) 233-4213; email: jstrongman@jvsdet.org Cybersecurity Conference. 7 a.m.-2

p.m. March 10. Detroit Regional Chamber. Experts from government, law enforcement and the private sector will cover topics to help businesses navigate the National Institute of Standards and Technology cybersecurity framework. Detroit Golf Club. $75, $25 for chamber members. Contact: Marianne Alabastro, phone: (313) 596-0479; email: malabast@ detroitchamber.com

Calendar guidelines. Visit crainsdetroit.com and click “Events” near the top of the home page. Then, click “Submit Your Events” from the drop-down menu that will appear. Fill out the submission form, then click “Submit event” at the bottom of the page. More Calendar items can be found at crainsdetroit.com/events.

ADVERTISING SECTION

ACCOLADES Warner Norcross & Judd LLP was recently recognized by PulteGroup, Inc. as its 2015 Law Firm of the Year. One of America’s largest homebuilding companies, Pulte recognized the law firm at its Legal Summit and highlighted the work of:

TECHNOLOGY

· Mary Jo Larson, client service manager for Pulte who oversees a Warner Norcross team of seven attorneys and staff focused on employee benefits issues for the 4,000-employee company · Lisa Zimmer, who helped with special projects · Jennifer Watkins, who assisted with compensation and EB issues · Norbert Kugele and April Goff, who focused on health care reform and other welfare issues

FINANCE Jeff Schultz, Vice President, National Business Development, QStride, Inc., Schultz, after almost a decade with global IT leader Genpact, will be responsible for national business development activities including client recruitment, operations, sales and business relations management. Schultz is a graduate of Central Michigan University where he studied business administration and was a member of the Men's Varsity Soccer program. He is a "Friend" of the Michigan Ballet Theater and enjoys spending time with his wife and daughter.

Jason Ramus,

Mark Lewandowski,

Marcia Ventura,

Commercial Relationship Manager,

Senior Vice President,

Talmer Bank and Trust, Mark joins a team of seasoned relationship managers responsible for servicing the banking needs of Southeast Michigan's local real estate developers. Lewandowski brings over 30 years of banking experience in commercial real estate lending. He held other roles at Comerica Bank including managing the collection of nonperforming assets, as well as the disposition of bank owned properties.

Kevin Reid,

Manager of IT and Communications,

Relationship Manager for Commercial Real Estate Banking

Ulliance, Inc.,

Talmer Bank and Trust,

Ramus is responsible for IT staff supervision and oversees IT initiatives, including application and website development, network administration, IT equipment upgrades and maintenance, and technical support. Prior to joining Ulliance, Ramus, a Royal Oak, Michigan resident, was president of datasoph, a web and mobile application development company in Royal Oak. His previous work experience also includes developer roles with 3CSI and General Motors.

NONPROFITS

Reid joins Talmer Bank with almost 11 years of experience with a focus on commercial real estate. He was most recently with First Merit Bank as Vice President, where he was responsible for managing a significant portfolio of commercial real estate loans throughout Michigan. Prior to that, he held multiple positions at PNC Bank, which all had a heavy focus on commercial real estate.

Invest Detroit, Invest Detroit is pleased to announce that Marcia Ventura has joined the organization as Senior Vice President. Marcia's primary areas of responsibility include the New Markets Tax Credit program and Commercial Real Estate transactions across Invest Detroit's targeted loan funds. Ms. Ventura has more than 20 years of experience, most recently as Vice President of Lender Relations at M Shapiro Real Estate Group, a private Southeast Michigan development company.

For more information or questions regarding advertising in this section, please call Lynn Calcaterra at (313) 446-6086 or email: lcalcaterra@crain.com

SPOTLIGHT

O’Malley leads Beaumont, Farmington Hills Beaumont Hospital-Farmington Hills appointed Constance O’Mal ley as president. She will be the

first woman to lead the hospital. O’Malley takes over from Dr. Paul LaCasse , who has been named vice president of the postacute care diConstance vision and diO’Malley versified business operations for Beaumont Health. “I am thrilled to lead Beaumont-Farmington Hills,” O’Malley said in a statement. O’Malley previously served as vice president and COO of Beaumont Hospital-Troy and vice president of surgical services and trauma, transplant and ambulatory services at Beaumont Hospi tal-Royal Oak. She also held other health care leadership positions.

Fathead CEO McInnis becomes chairman Pat McInnis , CEO of Detroitbased Fathead LLC for seven years, has been named chairman and will work on special projects with company owner Dan Gilbert , a FatPat McInnis head spokeswoman said in an email to Crain’s. Fathead would not say if another person has been named CEO. A handful of other leadership changes took place at the wall graphics company, but “no other staff reductions,” the statement said. Before taking the top job in 2009, McInnis had been president of Detroit-based Quicken Loans Inc. since 1993, according to his Linkedin profile.

Ehrlich to step down as Arotech exec chairman Robert Ehrlich, executive chairman of Ann Arbor-based Arotech Corp . and CEO from 2002 to 2014, will step down from the board of directors in May after deciding not to seek re-election to another term, the company announced. James Quinn , 63, former Northrop Grumman Corp . vice president of business development, will be the board nominee to fill Ehrlich’s vacancy at an annual shareholder meeting. He and current President-CEO Steven Esses, along with current director Kenneth Cappell , are seeking new three-year terms on the seven-member board. Ehrlich, 78, will remain chairman of Arotech’s Iron Flow Storage development program.

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JOB FRONT

MARKET PLACE

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INVESTMENT OPPORTUNITY

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Current partners seeking an owner/ operator to buy into and run an upscale coffee shop in S.W. Oakland Co. Great staff in place now with positive cash flow. Serious inquiries only:

ANALYZE MATCH

For much of last year, finding a long-term funding source for Michiganâ&#x20AC;&#x2122;s crumbling roads and bridges was a priority at the Capitol. Since then, the water emergency in Flint has become the stateâ&#x20AC;&#x2122;s most immediate problem, but the Flint crisis also is drawing attention to the condition of infrastructure statewide.

ROADS FROM PAGE 3

istration fees also will increase by 20 percent next year. The impact of that new revenue means less of an immediate drain on the stateâ&#x20AC;&#x2122;s general fund. Snyder proposed transferring $10.4 million in 2017 to keep the budget for state road and bridge projects at the same level as this year, Timpf said. Thatâ&#x20AC;&#x2122;s considerably less than the $400 million in general fund support for transportation in the current fiscal year, $265 million in 2015 and $451 million in 2014, MDOT spokesman Jeff Cranson said. New roads revenue will be collected for nine months of 2017 rather than the full fiscal year, and that income combined with other federal funding increases came in slightly short of current levels without the extra general fund dollars, Timpf said.

Seed investment Some of Michiganâ&#x20AC;&#x2122;s road-funding problem was the result of a stagnant state gasoline tax since the late 1990s. As a result, much of the general fund money diverted to roads was needed just to match Michiganâ&#x20AC;&#x2122;s share of federal road dollars, Cranson said. The roads package was criticized by Democrats and some business groups for the amount of time it will take for all the money to be realized, and for its reliance on $600 million in existing spending. Starting in 2019, money will be diverted from the general fund for roads â&#x20AC;&#x201D; $150 million that year, $325 million in 2020 and the full $600 million by 2021, MDOT estimates show. The first year of shifting money out of the general fund shouldnâ&#x20AC;&#x2122;t put too much of a strain on other budget priorities, Noyola said. He added of later years: â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;ll cross that bridge together when we get there.â&#x20AC;? For much of last year, finding a long-term funding source for Michiganâ&#x20AC;&#x2122;s crumbling roads and bridges was a priority at the Capitol. Snyder in November signed the $1.2 billion legislative package that raises new revenue and diverts some money from the stateâ&#x20AC;&#x2122;s general fund. Since then, though, the water emergency in Flint has become the stateâ&#x20AC;&#x2122;s most immediate problem. Lawmakers have approved tens of

Upcoming projects The Michigan Department of Transportation has identified significant road projects in metro Detroit for 2017. They include: I-94 (Wayne County)

What: Replacement of five bridges: Gratiot, Second, Cass avenues; Brush, Chene streets When: TBA Cost: $50.4 million I-75 (Wayne County)

Where: Near Rouge River and Fort, Goddard streets What: Deck replacement at Rouge River and Fort Street, bridge replacement at Goddard Street When: Spring 2017 start on southbound construction (southbound traffic will be detoured for entire two-year project); 2018 start on northbound construction (northbound traffic will use new southbound lanes). Project to coordinate with new Gordie Howe International Bridge Cost: $125 million Status: In design M-59 (Macomb County)

Where: M-53 to Hayes Road What: Reconstruction in both directions, including removal of concrete, addition of new drainage and filling in sidewalk gaps When: Spring 2017 start, with completion within one construction year Cost: $35.2 million Status: In design

Source: Michigan Department of Transportation

millions of dollars to help the city deal with a public health crisis caused by lead contamination in its drinking water, and Snyder has proposed another $195 million for Flint in his 2017 budget. Yet the crisis in Flint also is drawing attention to the condition of infrastructure statewide. Snyder has proposed using $165 million of what otherwise would go into the stateâ&#x20AC;&#x2122;s reserves next year to create a Michigan Infrastructure Fund. Snyder views the money as a seed investment that could not only help cities across the state identify

aging lead and copper pipes but also reward communities that combine infrastructure repairs with road or utility projects. Some in the industry say that would be a good move, even with the eventual infusion of new cash for roads. â&#x20AC;&#x153;If weâ&#x20AC;&#x2122;re redoing (the road), letâ&#x20AC;&#x2122;s be smart about this and use a little bit of resources and fix the infrastructure underneath it,â&#x20AC;? said Mike Nystrom, executive vice president of the Michigan Infrastructure & Transportation Association. â&#x20AC;&#x153;(Municipalities) are going to have to match those dollars. State money is not going to fix this problem.â&#x20AC;?

Email Inquiries to: cdbboxreply@crain.com Reference box #2001 in subject line

MISCELLANEOUS

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REAL ESTATE WATERFRONT PROPERTY

More money sooner Local governments will have some help starting next year. MDOT and county road commissions each receive 39 percent of the road-funding pot through a state formula, while cities and villages receive 22 percent. That equates to a combined $283 million for local road agencies, according to Snyderâ&#x20AC;&#x2122;s budget, compared to $189 million for the state. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s a big deal. Theyâ&#x20AC;&#x2122;ll start to see, proportionately, a lot more money a lot sooner,â&#x20AC;? Cranson said. â&#x20AC;&#x153;When somebody complains about potholes, theyâ&#x20AC;&#x2122;re not talking about I-96 for the most part. Theyâ&#x20AC;&#x2122;re talking about their local streets.â&#x20AC;? Michiganâ&#x20AC;&#x2122;s local road departments also will receive $32 million in federal funds through the Fixing Americaâ&#x20AC;&#x2122;s Surface Transportation, or FAST, Act President Obama signed in December, according to Snyderâ&#x20AC;&#x2122;s budget. The federal bill allocates $305 billion nationally over five years and is being praised for bringing certainty to road project planning. Michigan should receive $15 million in FAST Act funds for state trunklines. Noyola, of the county road association, said his agencies hope the certainty of future revenue will allow them to do more preliminary engineering work that could speed up projects. â&#x20AC;&#x153;If you can look forward and know what the future holds, thatâ&#x20AC;&#x2122;s a good thing for these companies,â&#x20AC;? Nystrom said. â&#x20AC;&#x153;And with the federal plan in place and the state plan in place, it allows these companies to do some good forecasting.â&#x20AC;? äĄ˛ Lindsay VanHulle: (517) 657-2204 Twitter: @LindsayVanHulle

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pected to close in July, he said. Jackson is minority owner of Queen Lillian Development. Jim Jenkins is majority owner of the company and is president and CEO of Detroit-based Jenkins Construction Inc., which will be the construction manager on The Mondrian. Detroit-based Hamilton Anderson Associates LLC is the project architect for Queen Lillian, which takes its name from Jackson’s mother (Lillian) and the mother (Queen) of its other founder, the late Don Davis, who cofounded Detroit-based First Independence Bank in 1970 and also had a distinguished career as a record producer and musician. First Independence was founded to provide mortgage and commercial loans to the area’s underserved black community at a time when redlining made it difficult for them to buy homes. Richard Hosey, a former senior vice president for Bank of America NA who now owns Detroit-based Hosey Development LLC, said finding financing for projects $10 million or less is easier than more expensive ones because of what he called “active social lenders. Invest Detroit, the Detroit Investment Fund and Capital Impact Partners, for example, are more active in that space. “Once you get above that $10 million level, now you need to be working with one of the large banks like J.P. Morgan Chase; Fifth Third is starting to get active in the market, and Bank of America is returning to the market,” he said. “And it’s a longer walk making sure that all of their concerns are satisfied.” He said The Mondrian should fill an ongoing need for residential units along the Woodward Avenue spine through downtown, particularly along its western side south of MLK. In Midtown, the multifamily occupancy rate is around 98 percent, according to a December 2015 Midtown Detroit Inc. report, which surveyed 6,072 units in 149 properties in the area. “It’s good to see him on that side of the block, and I expect it to spur activity,” he said. 䡲

nership Program funds, according to Jackson. The financing stack is ex-

Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

FROM PAGE 3

ested tenants, lenders wanted 50 percent of the building preleased to approve a construction loan. “We were chipping away at it slowly but surely, but it wasn’t getting to that critical mass” of 35,000 or so square feet pre-leased, said Jackson, a former staffer to Detroit City Council President Gil Hill and former part owner of Greektown Casino-Hotel. That office lending prerequisite is par for the course, said Dennis Bernard, founder and president of Southfield-based Bernard Financial Group Inc.

“Unless you’re a really big player, you need at least 50 percent preleasing before you’re going to get a construction loan,” said Bernard, whose company originates debt for real estate deals. That’s when the multifamily development, the first phase of which is expected to cost $24 million, became the project focus. Construction loans for those projects are typically issued based on market demand and expected rental rates. There are 68 units with an expected average rental rate of $2.07 per square foot in The Mondrian’s first phase, which would also include a 150-space parking deck and the first-floor retail space. (About 10,000 square feet remains after expected leases by Huntington Bank and a pharmacy, Jackson said.) A second phase would be built with an additional 36 units on top of the attached parking deck with about 150 spaces, Jackson said. The second phase would be about $4 million, bringing total project cost to $28 million. First-phase financing is expected to come from a $14 million first-position mortgage; $1.7 million from Invest Detroit; $3.5 million from the Michigan Strategic Fund’s Community Revitalization Program; $2.2 million in owner equity; and $1 million in

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PACT FROM PAGE 3

cause their success is our success,” Mullany said. “Right now we have a vendor relationship, and a weak one. We want much more.” Mullany said he wants a multiyear deal to avoid triggering automatic six-month extensions that would fail to meet expectations of both sides. “I understand Wayne State is in the middle of a turnaround,” Mullany said. “They have productivity issues and need to consolidate a lot of positions, but it’s difficult because faculty have tenure.” Last December, Wayne State announced it was undertaking a financial turnaround plan because a review discovered a $29 million annual loss — amounting to a $1.5 millionper-month burn rate — for the medical school and its faculty medical group. This was just two months after learning the school had been taken off accreditation probation. Hefner acknowledged Wayne State is putting in place financial controls and a three-year turnaround plan. He said a long-term contract of 10 years or more with an increase in payments is critical to its success. “If DMC is that interested in repositioning themselves as a true academic medical center with a medical school as a true partner to improve health care in Detroit,” then the contract needs to be strong on the transactional side but also transformational in nature, Hefner said. “It is the only way to get us to a top 15 academic health system and a top 40 medical school ranking,” he said. Mullany confirmed his goal is to make DMC, a for-profit hospital owned by Dallas-based Tenet

Healthcare Corp., a top 15 academic health system as measured by Tru ven Health Analytics in Ann Arbor. “We want to create more programs of distinction that people are willing to travel 50 miles or more to seek care at DMC,” Hefner said. Wayne State’s goal is to become a top 40 medical school by clinical, research, educational quality, costs, access and innovation as measured by National Institutes of Health research funding. Wayne State is now ranked 69th nationally. To achieve their goals, Wayne State and DMC have just begun to address a laundry list of contract issues. Experts interviewed by Crain’s say the thorniest issue will be what annual payments DMC will make to Wayne State for clinical services, teaching and administration. They say both sides have long-standing gripes about the other. “DMC can’t get to a top 15 academic health system without a vibrant medical school partner,” said Hefner, noting that a specific dollar increase hasn’t been broached yet. Mullany said he believes DMC pays Wayne enough for services. To reduce its costs, Wayne needs to improve efficiencies and faculty productivity to improve operations, he said. But Wayne State officials have said DMC has short-changed Wayne over the past seven years and needs to boost payments for administrative services and fulltime equivalent physician pay. Hefner said “the payments now received by Wayne (does not create) a sustainable relationship.” Mullany said DMC funding has declined because Wayne simply provides fewer patient services than in previous years.

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“We pay them the same rate for teaching,” Mullany said. “The clinical coverage has declined for several reasons. Medicaid expansion has led to less indigent care ,and payments have been reduced because less services” are provided by Wayne State faculty physicians. But Hefner said if DMC wants to become Wayne State’s full partner and primary teaching hospital, the contract should include the following: 䡲 A long-term contract instead of a series of transactional provisions. 䡲 Mutual agreement to coordinate strategic planning. 䡲 Commitment by DMC to invest in research infrastructure to help support Wayne State’s $100 million annual biomedical grants. 䡲 Shared governance in which top executives sit on each other’s management committees. 䡲 DMC becomes Wayne State’s primary teaching affiliate for medical students, residency programs and clinical programs. For example, Hefner said DMC needs to increase the number of medical students trained at DMC hospitals. Currently, DMC trains onethird of the 800 Wayne State students on rotation at any given time. The rest go to Henry Ford Health System hospitals, St. John Providence Health System hospitals, Beaumont Hospital Dearborn, John D. Dingell VA Medical Center and St. Joseph Mercy Health System hospitals. Mullany said DMC has a capacity for more medical students. He didn’t say how many more, but Hefner said at least half must be trained there to be considered Wayne’s primary teaching partner. 䡲 Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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Detroit shifts to 2nd gear in bankruptcy settlement plan By Chad Halcom chalcom@crain.com

As Detroit considers ramping up one possible legal strategy to recover money from its costly Chapter 9 bankruptcy, another one from last fall has started to gain some resolution in court. Of the 180-plus vendors targeted in $50 million worth of legal actions late last year for “preferential” payments prior to Detroit’s July 2013 bankruptcy, a dozen companies either settled or reached agreements to dismiss $3.8 million in claims just in the past four weeks. An additional $2 million-plus more in claims are awaiting a settlement approval in a matter of days or close to a judgment because the company hasn’t responded and is in default, according to U.S. Bankruptcy Court records in Detroit.

PENSIONS FROM PAGE 1

consultant was to blame for allegedly using outdated mortality tables to calculate life expectancy of city retirees, but the city’s actuary during the bankruptcy case was Seattle-based Milliman Inc. The city paid Milliman $1.97 million, according to bankruptcy records. In November, the pension funds’ actuary, Southfield-based Gabriel, Roeder, Smith & Co. , performed an updated mortality study. The study concluded that instead of $111 million, starting in 2024, Detroit needs to pay $194.4 million, according to a Nov. 24 letter from the Michigan Department of Treasury to Gov. Rick Snyder, with further payments in subsequent years adding up to $491 million. A Milliman spokeswoman did not respond to messages last week seeking comment. Former Detroit emergency manager Kevyn Orr did not respond to messages last week seeking comment. Jeremy Gold, consulting actuary and owner of New York-based Jere my Gold Pensions , said Friday that public pension plans are modeled a bit differently than private sector ones that follow the federal Employee Retirement Income Security Act, where actuaries have more control over assumptions about mortality and liability projections. In public plans, actuaries often advise or consult with plan administrators and their governing boards, and projections can sometimes vary up to 50 percent between firms. “The actuaries are not required to comment on whether or not what they are asked to assume is reasonable, and for reasons of their own they often seem to assume their clients’ assumptions are reasonable,” he said. “I’m not faulting individual actuaries. They’re in a hard, competitive environment. If they give numbers that don’t allow for small enough contributions in the present for their client, there’s pressure they may lose to a competitive firm that makes different numbers and as-

Recent dismissals range ifrom a $1.2 million claim against DTE Ener gy Co. and an $826,526 claim against Plante & Moran LLP , to a $68,620 claim against Arrow Office Supply Co. that was settled in mid-February. But the deals do not all mean money in the bank for Detroit, which estimates it brought 185 cases through New York bankruptcy law firm Togut, Segal & Segal LLP in the run-up to a Dec. 5 filing deadline to seek refunds on alleged preference payments. In many cases the company obtained a dismissal because it could document its payments were appropriately made in the “ordinary course of business” with the city. Other companies might have been able to show they had a contract that continued through the bankruptcy or was assumed by a

different company — basically that it did not get inappropriate or preferential treatment as a creditor, local bankruptcy attorneys said. Deputy Corporation Counsel Charles Raimi said Bankruptcy Judge Thomas Tucker put a hold for a while on the claims to give the city a chance to meet with vendors and resolve as many of them as possible, even before the vendors had to make early procedural replies in court. The city went through an extensive review but had to bring any and all claims by the deadline to preserve its chances to collect from a vendor. Additional facts have come in on many of the payments since then, he said. Federal bankruptcy law typically allows a debtor to recoup payments that creditors receive within 90 days before filing bankruptcy, when a debtor was insolvent, on the basis

that pre-petition payments allow some creditors to collect more than they would have via the normal bankruptcy process. Creditors, however, typically can counterclaim they were paid in their “ordinary course of business” — say a typical monthly payout within 30 days after a regular service, rather than a negotiated payment on accumulated debt, in order to protect those who do business with a troubled company. Preference payment suits are somewhat common after large bankruptcies are concluded, and local attorneys said the first cases to settle are often those where the facts are clear-cut either for or against the vendor. Rarely if ever does a post-bankruptcy debtor get all the money back that it requests. “Typically what settles out early

(are) things where a company was sued and shows it shouldn’t have been sued,” said Scott Wolfson, partner at Troy-based Wolfson Bolton PLLC. Sheryl Toby, a senior partner in the bankruptcy, insolvency and creditors’ rights practice at Dykema Gossett PLLC, said there is no set rule on how much a debtor will really collect on preference actions. To some degree, she said, that will depend on how much scrutiny or defense a debtor applies to its potential claims before filing suit to recover payments. “If they applied a certain kind defense prior to filing, and took that into account at the very beginning, then generally there’s going to be a much lesser discount” when cases settle, she said. 䡲

sumptions. If there’s going to be any bad guy, it’s going to be the profession as a whole. The standards of review are not stringent enough.” A New York hedge fund president criticized Duggan’s legal threat. “Duggan’s nuts; at best, this is a desperate political stunt to garner goodwill,” said David Tawil, co-founder and president of New York City-based Maglan Capital. “How’s he polling?” Orr briefly flirted with switching city workers to a 401(k)-style plan but later dropped the idea. U.S. Bankruptcy Judge Steven Rhodes, who presided over Detroit’s restructuring, told the Detroit Free Press early last year that not implementing a 401(k)style plan was a “missed opportunity” and said at Crain’s Newsmaker of the Year event last year that states and municipalities need to move to similar defined-contribution plans. The alleged miscalculation in the city’s debt-cutting plan happened even though the plan was reviewed by Duggan and city officials, approved by a judge and crafted by a team of consultants and bankruptcy lawyers who were paid $177 million while working for Orr. “The optics are not good,” said Douglas Bernstein, a banking and bankruptcy partner with Bloomfield Hills-based Plunkett Cooney PC. “Because one of the main purposes for going through the bankruptcy was to clean up this problem.” But consultants did not share the mortality data with city officials during the bankruptcy, a move that delayed Detroit learning about the $491 million pension fund shortfall, Duggan said. Duggan leveled that allegation in the wake of his claim last week that bankruptcy consultants used outdated data to forecast retiree life expectancy. “Right now, we are doing well and our property tax revenues are running so far ahead of budget that we’ve got a cushion,” Duggan said. “If that trend grows (of people moving back into the city), we can sustain our services and continue that contribution.” The shortfall has soured the city’s relationship with Cleveland-based law firm Jones Day, which was paid

$57.9 million during the bankruptcy case, Duggan said. After discovering the apparent $491 million shortfall, Duggan said the city is considering a malpractice lawsuit against bankruptcy consultants. “It’s a pretty adversarial situation,” Duggan said during a Feb. 25 budget presentation. “What we are learning leads us to believe that the consultants knew they were using out-ofdate life expectancy tables and did not share that with me or (CFO John Hill). It never occurred to me to bring in someone to cross-examine and find out if the tables were current. “I was not allowed to run the finances or actually have any input other than what the judge allowed me under the emergency manager law.” A Jones Day spokesman did not respond to a message seeking comment. The city faces a “tough hurdle” if Duggan files a lawsuit because bankruptcy consultants were shielded from most liability as part of Detroit’s debt-cutting plan, Bernstein said. The bankruptcy plan insulated Orr and consultants from liability except for gross negligence or willful misconduct, according to Detroit bankruptcy records. “If what Duggan says is true, is this a level of failure so far beyond the duty that it constitutes gross negligence?” Bernstein said. “That would be a tough hurdle.” It is unfortunate that nobody caught the miscalculation, Bernstein said, assuming the shortfall is accurate. “Didn’t someone have the opportunity to point this out or was everybody asleep at the switch?” Bernstein said. Police and fire pension fund officials saw the shortfall coming before the city exited bankruptcy court. “There was a rush to enter into bankruptcy and an equal push to exit bankruptcy without a full analysis of all the actuarial data,” fund spokesman Bruce Babiarz said in a statement. “The longtime actuaries for the pension system warned about shortfalls during the bankruptcy based on the actuarial tables used by the emer-

gency manager’s team, the change in the assumed rate of returns and the shift to a market-based return from an actuarial-based return as is commonly used by virtually every other public pension system in the country,” Babiarz added. While the city was under Orr’s control almost entirely during the bankruptcy, Duggan and City Council members had access to key documents. Council President Brenda Jones testified during the city’s bankruptcy case in October 2014 that she hadn’t read key portions of the debtcutting plan, including a report prepared by Birmingham-based turnaround firm Conway MacKenzie Inc. “At the time of your deposition, you hadn’t walked through each of the restructuring initiatives with Mayor Duggan, had you?” she was asked. “No, I had not,” Jones said. “And you hadn’t sat down with Mayor Duggan and gone through the amount of money that had been allocated under the (restructuring and reinvestment initiatives) for each of the city departments, right?” Jones was asked. “No, I had not,” she said. On Thursday, Jones said she was surprised to learn of the shortfall. “It’s a great shortfall that we had not expected,” she said. “Jones Day was paid good money to do a job. ...” Conway MacKenzie officials declined to comment, citing confidentiality restrictions. The city has more than 25,000 retirees, active workers and beneficiaries who receive benefits from two Detroit pension funds, one representing police and fire personnel and a fund representing non-uniformed employees. The Police & Fire Retirement Sys tem is 88.9 percent funded and has $3.1 billion in assets. The General Retirement System pension fund is 62.5 percent funded and has $2 billion in assets. The city has agreed to fully fund both retirement systems starting in 2024. The Duggan administration has consistently pledged to fully fund

the city’s retirement system, General pension fund spokeswoman Tina Bassett wrote in an email to Crain’s. “We will continue to monitor the situation and work closely with the city to ensure all obligations and payments are met,” she said. The city has not talked to Jones Day lawyers since discovering the alleged shortfall, Hill said. But the city has sent notice not to destroy documents that could help explain what led to the apparent miscalculation, Duggan said. “The consultants took the documents with them,” Duggan said. “The documents we are finding are encouraging us to go forward” with pursuing a lawsuit. Deputy Corporation Counsel Charles Raimi told Crain’s last week the city might work with an outside law firm if it decides to sue. It’s still too early to tell what legal claims might be viable or who the most likely defendants would be in a lawsuit. “We’re still looking at all of that, but I expect that’s something we would be working out very quickly,” Raimi said. In the meantime, the city will contribute $20 million through next year to help fill the $491 million shortfall, Duggan said. The city has money thanks, largely, to the bankruptcy, which let Detroit shed about $7 billion in debt. Detroit is projecting at least a $30 million surplus this year as part of a $1.077 billion proposed general fund budget, Duggan said. He said the city also is on track to have three years of balanced budgets and by January 2018 could be freed from oversight of a financial review commission created as part of the bankruptcy plan. “We need three straight balanced budgets so it is absolutely critical we finish 2017 with a balanced budget,” Duggan said during a Feb. 25 budget presentation. “I would like to return self-determination all the way back to city government.” 䡲

Chad Halcom: (313) 446-6796 Twitter: @chadhalcom

Kirk Pinho and Chad Halcom contributed to this report. Robert Snell: (313) 446-1654 Twitter: @robertsnellnews

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CRAIN’S DETROIT BUSINESS

Campaign backers from Michigan business community

www.crainsdetroit.com

System

䡲

䡲䡲

Denise Ilitch, president, Ilitch Enterprises

Regional Chamber

Isaiah “Ike” McKinnon, deputy mayor, city of

Roger Penske, chairman and CEO, Penske Corp. (NOTE: Penske’s contribution is listed to Mooresville, N.C., address)

Editor-in-Chief Keith E. Crain Group Publisher Mary Kramer, (313) 446-0399 or mkramer@crain.com Editor Jennette Smith, (313) 446-1622 or jhsmith@crain.com Director, Digital Strategy, Audience Development Nancy Hanus, (313) 446-1621 or nhanus@crain.com Managing Editor Michael Lee, (313) 446-1630 or malee@crain.com Managing Editor/Custom and Special Projects Daniel Duggan, (313) 446-0414 or dduggan@crain.com Assistant Managing Editor Kristin Bull, (313) 446-1608 or kbull@crain.com News Editor Beth Reeber Valone, (313) 446-5875 or bvalone@crain.com Senior Editor Gary Piatek, (313) 446-0357 or gpiatek@crain.com Research and Data Editor Sonya Hill,(313) 446-0402 orshill@crain.com Editorial Support (313) 446-0419; YahNica Crawford, (313) 446-0329 Newsroom (313) 446-0329, FAX (313) 446-1687 , TIP LINE (313) 446-6766

Marco Rubio

REPORTERS

A sampling of Michigan business and government leaders who gave the maximum individual contribution ($2,700)* to presidential candidate campaigns:

䡲

Hillary Clinton

䡲

Dan Stamper,

䡲

䡲 Doug, Helen, Maria, Pamella, Richard, Dick, Suzanne, Betsy, Daniel

Brenda Lawrence, U.S.

Nancy Schlichting, CEO, Henry Ford Health

Detroit David Provost, chairman and CEO, Talmer

Bank and Trust

Robert Taubman, chairman and CEO,

Bobby Schostak, CEO Templar Baker Group and former Michigan Republican Party chairman

䡲

David and Mark Schostak, Schostak Bros.

䡲

Hendrik G. Meijer, co-

chairman and co-CEO, Meijer Inc.

䡲 Richard, Dick, Betsy, Helen, Maria, Doug & Dalton DeVos $2,700 each 䡲 Bill Schuette, Michigan attorney general 䡲 Sam Valenti, CEO, Valenti Capital LLC 䡲 Steve Van Andel, chairman, Amway Corp. 䡲 Terri Lynn Land, former secretary of state 䡲 John Rakolta Jr., CEO, Walbridge

DONORS FROM PAGE 1

rowed and Bush has left the race. “We believe that supporting candidates is something we should all be doing,” Dick DeVos told Crain’s. “What we’re looking at is: Who do we think is going to be the best leader for all of America? We think Marco Rubio is that leader.” DeVos said he and his wife, Betsy, have known Rubio since he was in the Florida House. They worked with him primarily on education issues, including expanding school choice. He said his family contributed to several candidates early in the race before they were ready to endorse

䡲

Mark Davidoff, Deloitte

LLP

䡲

John Rakolta Jr., CEO,

Walbridge

䡲 Peter Karmanos Jr., owner, Carolina Hurricanes NHL team, founder, Compuware 䡲䡲䡲

Patrick Doyle, CEO, Domino’s Pizza Steve Van Andel, chairman, Amway Corp.

Dan Gilbert, $500,000 to America Leads (pro-Chris Christie super PAC), $750,000 to America Leads, $100,000 to New Day for America (pro-Kasich super PAC)

Jay Greene, senior reporter Covers health care, insurance, energy, utilities and the environment. (313) 446-0325 or jgreene@crain.com Chad Halcom Covers litigation, the defense industry and education. (313) 446-6796 or chalcom@crain.com Tom Henderson Covers banking, finance, technology and biotechnology. (313) 446-0337 or thenderson@crain.com Kirk Pinho Covers real estate, Oakland and Macomb counties. (313) 446-0412 or kpinho@crain.com Bill Shea, enterprise editor Covers media, advertising and marketing, the business of sports, and transportation. (313) 446-1626 or bshea@crain.com Robert Snell, reporter Covers city of Detroit and regional politics. (313) 446-1654 or rsnell@crain.com Lindsay VanHulle, Lansing reporter. (517) 6572204 or lvanhulle@crain.com Dustin Walsh, senior reporter Covers the business of law, auto suppliers, manufacturing and steel. (313) 446-6042 or dwalsh@crain.com Sherri Welch, senior reporter Covers nonprofits, services, retail and hospitality. (313) 446-1694 or swelch@crain.com

*Contributions were tallied as of late January.

ADVERTISING

Source: Federal Election Commission

Sales Inquiries (313) 446-6032; FAX (313) 393-0997 Advertising Director Matthew J. Langan Advertising Sales Catherine Grace, Joe Miller, Sarah Stachowicz Classified Sales Manager Angela Schutte, (313) 446-6051 Classified Sales Lynn Calcaterra, (313) 446-6086 Events Manager Kacey Anderson Creative Services Director Pierrette Templeton Senior Art Director Sylvia Kolaski Marketing Coordinator Ariel Black Special Projects Coordinator Keenan Covington Sales Support Suzanne Janik, YahNica Crawford Editorial Assistant Nancy Powers Production Manager Wendy Kobylarz Production Supervisor Andrew Spanos

Other contributions of note

䡲 Richard DeVos Sr., $250,000 to Right to Rise USA (pro-Bush super PAC), $250,000 to Conservative Solutions (pro-Rubio super PAC) 䡲䡲

Sandy Baruah, $2,000 to Right to Rise

Dalton, Daniel, Doug, Betsy, Helen, Maria, Richard & Dick DeVos $2,700 each

John Kasich

䡲 Richard, Betsy, Dick & Helen DeVos $2,700 each 䡲

David Cotton, CEO, Meridian Health Plan

“The instinct right now is for a lot of the Bush supporters and donors to head over to Rubio’s side, but there are also a lot of people who are staying on the sidelines.” Susan Demas,Inside Michigan Politics one, adding that “we were not prepared to make a decision at that early stage.” Other top GOP donors already have invested a lot of money in Bush, but now that he has suspended his campaign they “may be gun-shy,” said Susan Demas, editor and publisher of Lansingbased political newsletter Inside Michigan Politics. “The instinct right now is for a lot of the Bush supporters and donors

INDEX TO COMPANIES These companies have significant mention in this week’s Crain’s Detroit Business: Amherst Partners .............................................110 Bank of Michigan.................................................77 26 Blue Cross Blue Shield of Michigan................2 BorgWarner ........................................................113 9 Cascade Partners ...............................................9 8 Crain’s Detroit Business ....................................8 3 Detroit Medical Center ......................................3 26 DTE Energy Foundation...................................2 4 The Empowerment Plan....................................4 Flatout Holdings................................................112 Harvard Drug Group...........................................111 9 Honigman Miller Schwartz and Cohn ..............9

Dan Gilbert, chairman, Quicken Loans Inc.

䡲

Tom Gores, owner, Detroit Pistons (NOTE:

Jeb Bush

䡲

Sandy Baruah, president and CEO, Detroit

Debbie Dingell, U.S. representative

Gores’ contribution is listed to Beverly Hills, Calif., address)

DeVos $2,700 each

Chris Christie

$2,700 each

D-Dearborn

䡲

䡲 Manuel “Matty” & Matthew Moroun $2,700 each

䡲

Taubman Centers Inc.

representative D-Southfield

䡲

Scott Walker

president, Ambassador Bridge Joseph Mullany, CEO, Detroit Medical Center

䡲

David Provost, chairman and CEO, Talmer

Bank and Trust

Horizon Global ...................................................110 Huron Capital Partners ....................................110 Level One Bancorp ..............................................77 Michigan Campaign Finance Network .............11 3 Michigan Department of Transportation .......3 3 The Mondrian ......................................................3 Quarton Partners..............................................110 3 Queen Lillian Development...............................3 Rizvi Traverse Management.............................113 Rockbridge Growth Equity ..............................110 3, 26 Wayne State University...............................3

to head over to Rubio’s side, but there are also a lot of people who are staying on the sidelines because his position doesn’t look particularly strong,” Demas said. She is predicting Donald Trump and Clinton victories in Michigan, based on recent Inside Michigan Politics polling that suggests both candidates are carrying doubledigit percentage-point leads.

Targeting super PACs Federal contribution limits cap individual donations to candidate committees at $2,700 per election. Contributions to independent expenditure political committees, often called super PACs, are unlimited. A recent analysis of FEC campaign finance records by the Michigan Campaign Finance Network shows Michigan donors gave roughly $638,500 to candidate committees, while just five donors gave $620,500 to super PACs supporting candidates. The latter suggests where some

such donors are placing their support post-Bush: In January, Amway Corp . co-founder Richard DeVos (Dick DeVos’ father) gave $250,000 each to super PACs supporting Bush and Rubio, Mauger’s analysis shows. Dan Gilbert, chairman of Detroit-based mortgage lender Quicken Loans Inc . and real estate magnate, gave $100,000 to a super PAC backing Kasich — following previous contributions topping $1 million to a super PAC supporting New Jersey Gov. Chris Christie, who also has quit the campaign. A spokeswoman for Gilbert said he does not comment on his political contributions. “What we’re seeing is that a few large donors are being able to basically give the same amount of money as the hundreds of Michigan individuals who are giving to the candidate committees, who face contribution limits,” Mauger said. “The spending is a lot more clouded.” In the charts (on Page 1 and this page), Crain’s searched FEC records to find out who some of Detroit’s and Michigan’s business and government leaders are backing for president. The results reflect a sampling of $2,700 individual contributions. 䡲 Lindsay VanHulle: (517) 657-2204 Twitter: @LindsayVanHulle

CUSTOMER SERVICE Main Number: Call (877) 824-9374 or customerservice@crainsdetroit.com Subscriptions $59 one year, $98 two years. Out of state, $79 one year, $138 for two years. Outside U.S.A., add $48 per year to out-of-state rate for surface mail. Call (313) 446-0450 or (877) 824-9374. Single Copies (877) 824-9374 Reprints (212) 210-0750; or Krista Bora at kbora@crain.com To find a date a story was published (313) 4460406 or e-mail infocenter@crain.com Crain’s Detroit Business is published by Crain Communications Inc. Chairman Keith E. Crain President Rance Crain Treasurer Mary Kay Crain Executive Vice President/Operations William A. Morrow Executive Vice President/Director of Strategic Operations Chris Crain Executive Vice President/Director of Corporate Operations KC Crain Vice President/Production & Manufacturing Dave Kamis Chief Financial Officer Thomas Stevens Chief Information Officer Anthony DiPonio G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) Editorial & Business Offices 1155 Gratiot Ave., Detroit MI 48207-2732; (313) 446-6000 Cable address: TWX 248-221-5122 AUTNEW DET CRAIN’S DETROITBUSINESS ISSN # 0882-1992 is published weekly,except fora special issue the third weekof November,and no issue the third weekofDecemberby Crain Communications Inc.at 1155 Gratiot Ave.,Detroit MI 48207-2732.Periodicals postage paid at Detroit,MI and additional mailing offices.POSTMASTER: Send address changes to CRAIN’S DETROITBUSINESS,Circulation Department,P.O.Box07925,Detroit,MI 48207-9732. GST# 136760444.Printed in U.S.A. Entire contents copyright 2015 byCrain Communications Inc.All rights reserved.Reproduction oruse ofeditorial content in anymannerwithout permission is strictly prohibited.

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DTE gives WSU $1.4M in grants; main focus is retention, grad rates By Chad Halcom chalcom@crain.com

The nonprofit DTE Energy Foundation has awarded nearly $1.4 million in three new grants to Wayne State University, most of it for a new program to improve retention and early graduation rates for new students in the College of Engineering. Some $1.2 million of foundation funding will go to the pilot DTE Energy Foundation Eos Program for Student Success, launched last fall as an academic and financial assistance program for first- and second-year engineering students. Eos Program recruits up to 60 new undergrads per year and offers

academic support through mentorship, group projects, prerequisite course enrollment and assistance and even parking and meal vouchers to help early students get more engaged with their studies. Eos gets its name from the Greek goddess of the dawn — sister to Helios, used in other engineering program names and the college’s fund for student success. President and COO Steven Kurmas of Detroit-based DTE Energy and engineering school Dean Farshad Fotouhi both said the university approached DTE for assistance as part of its capital campaign. “It’s important because Wayne State graduates also tend to stay in Michigan and contribute to the

comeback of our economy, perhaps moreso than any other local public university,” Kurmas said. Fotouhi said the university identified the need for early student assistance based on graduation and retention issues facing the university as a whole. An additional $100,000 foundation grant from DTE is going to the summer enrichment program of WSU’s Center for Latino/a and Latin American Studies, to help incoming first-generation college students transition to university academics; and $48,000 more goes to the Mike Ilitch School of Business for scholarship assistance with tuition. 䡲 Chad Halcom: (313) 446-6796 Twitter: @chadhalcom

Report: Blues lag others nationally By Jay Greene jgreene@crain.com

Blue Cross Blue Shield of Michigan

Acquisitions

States Canadian provinces

lagged behind fellow Blues plans in other states in a collective earnings decline. Blue Cross Blue Shield of Michigan posted 5.2 percent higher revenue to $8.39 billion during the first nine months of 2015, but also posted losses of $230 million during those three quarters, a 158 percent decline from the same nine-month period in 2014, according to Chicago-based Fitch Ratings Inc. Officials for Detroit-based Blue Cross told Crain’s they plan to release full-year financials on Tuesday. They had no comment on the Fitch credit report, which concluded that the nation’s 35 Blues fared more poorly than their for-profit competitors, including United Healthcare and Aetna Inc. On whether health insurers might have rebounded in the last three months of the fiscal year, Mark Rouck, Fitch senior director,

EXPANDING:

said health insurers tend to post worse financials during the last quarter of the year because patient care expenses usually accumulate after deductibles are met earlier. “It is somewhat hard to overcome three quarters with one quarter, especially the last one in the year because claims need to be paid,” said Rouck. Fitch said 23 of the 35 Blues plans reported a collective $1.9 billion decline in earnings for the first nine months of 2015, and 16 reported net losses. The biggest contributor to the decline in earnings was Blue Cross of Michigan with a $622 million difference in profits to losses, followed by Chicago-based Health Care Service Corp. ($442 million) and Pittsburghbased Highmark Group ($266 million). Michigan Blue Cross officials have told Crain’s in the past that use of services was higher than expected both in the commercial and Medicaid market. 䡲

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WEEK Goodwill,Vanguard to open $2M career center in North End

oodwill Industries of Greater Detroit and Vanguard Community Development Corp.

have secured $2 million in funding to renovate a building in Detroit’s North End neighborhood into a career center offering job readiness, training and placement and financial literacy programs. The North End Workforce Readiness Center will be housed in the 100,000-

square-foot building Vanguard owns at 2777 E. Grand Blvd. Goodwill will lease the building.

COMPANY NEWS 䡲 Quicken Loans Inc. is trying once more to transfer a federal lawsuit brought by the U.S. Depart ment of Justice in Washington, D.C., back to its home base in Detroit after a federal judge previously denied a similar transfer request last month. Quicken filed an appeal Friday of a federal judge’s Dec. 31 order dismissing its initial lawsuit against the government. 䡲 Dallas-based Comerica Bank Inc. said it signed a deal with Detroitbased Olympia Entertainment to become the third major sponsor of the $627.5 million Detroit Red Wings arena under construction. Terms were not disclosed. Comerica becomes sole sponsor of the arena’s Players Club premium area. 䡲 Only weeks after announcing his departure as president of Beaumont Hospital-Royal Oak, Shane Cerone will become a partner in Van Conway’s new advisory firm, Birmingham-based Van Conway and Partners LLC.

Also joining the Shane Cerone: firm as a partJoins Van Conway ner is Billy Marand Partners LLC. tinez, president and CEO of Troy-based One Lily Pad LLC. The hires are the first for Conway, who is suing his former firm, Birmingham-based Conway MacKenzie Inc. 䡲 Doctors Hospital of Michigan in Pontiac took one step closer to a financial turnaround when a federal bankruptcy judge approved a plan for Sant Partners LLC, an Austin, Texas-based, family-owned private equity company, to take over management of the hospital. 䡲 Van Buren Township is closer to financial pitfalls after a Wayne County Circuit Court judge ruled against the township in a bond payment battle with its largest corporate resident, Visteon Corp. The suit alleged the auto supplier breached its contract over bonds tied to the construction of Visteon’s 263-acre campus near

ON THE WEB FEB. 20-26

Detroit Digits A numbers-focused look at last week’s headlines:

The number of casinos owned by Dan Gilbert’s Rock Gaming LLC to be rebranded under the name Jack, including Greektown-Hotel Casino in Detroit. The change represents the divorce of Gilbert’s entertainment business from Las Vegas gaming giant Caesars Entertainment Corp.

$180M

The projected cost of redeveloping the failed Bloomfield Park site in Pontiac and Bloomfield Township. The 87-acre site, rebranded as Village at Bloomfield, is expected to include 300 to 350 market-rate residential units under the plan by Redico LLC.

30,000

The number of bricks to be repurposed by Green Garage LLC for a community park in Midtown. The bricks come from the former Marie Apartments building at 438 Selden St. in Detroit.

Ecorse Road and I-275.

䡲 On Demand Mail Services LLC

will move to Pontiac from Auburn Hills by June 1 and bring about 250 jobs in a $2 million investment. The company bundles and presorts mail to offer postage discounts to customers. 䡲 Ann Arbor-based Arotech Corp. will supply 70,000 rechargeable batteries to the Israeli government later this year, after receiving a new $8.5 million product order payment from the country’s Ministry of Defense. 䡲 Activist shareholders of Nashville, Tenn.-based TeamHealth, stating the physician staffing firm has made “some missteps in critical areas,” are asking for three seats on its board of directors, one for Nancy Schlichting, outgoing CEO of Henry Ford Health System in Detroit.

RUMBLINGS

OTHER NEWS Sara Jane Boyers’

䡲 The Albert Kahn -designed building in Oak Park that once transmitted WWJ broadcasts is expected to be converted into a restaurant by Curt Catallo , owner of the Union Joints restaurant group. Catallo said he expects the site at 12700 W. Eight Mile Road to take 18-24 months to open once construction begins. 䡲 Top executives at tech companies in Southeast Michigan are very bullish, with 99 percent of them predicting an increase in revenue this year, according to Automation Alley ’s newly released annual technology industry report. Twenty-five percent expect a revenue increase of more than 15 percent. 䡲 Detroit Lions quarterback Matthew Stafford is raising funds for charity by creating oneof-a-kind paintings. Stafford announced he and Repreve — a brand of Greensboro, Matt Stafford: N.C.-based Raising funds for Unifi Inc. that charity with art. produces fiber from recycled materials — are raising money for S.A.Y. Detroit Play Center. The initiative is dubbed “Paint by Number 9,” a reference to Stafford’s jersey number. 䡲 Former Republican state Reps. Todd Courser and Cindy Gamrat were charged in district court with felony misconduct in office after their extramarital affair resulted in the expulsion of one and resignation of the other.

OBITUARIES 䡲 Raymond Weingartz, retired president of Utica-based outdoor power equipment retailer Weingartz Supply Co. and wholesaler Power Equipment Distributors, died Feb. 23. He was 78. 䡲

Thin mints and margins

COURTESY OF EVANS DISTRIBUTION SYSTEMS

Sean Mueller, director of customer solutions for Melvindale-based Evans Distribution Systems Inc., spoke on Feb. 24 to Girl Scouts ofSoutheastern Michigan about

improving their supply chain. Evans provides logistics to the Girl Scouts for its Digital Cookie program, in which it sells cookies online as opposed to the traditional door-todoor method (or parents pushing them on co-workers).The fulfillment, packaging and the like are handled by Evans. Kellogg Co. bakes the cookies and UPS Inc. ships the online orders.

image of Lafayette Park was selected for the cover of the 2015 Detroit Homecoming program.

Postcard contest yields vivid Detroit images ighteen photographers from the Detroit area and other national and international cities were named winners of a postcard contest Thursday for their images of Detroit that tell short stories about life in the city. The winners were recognized at the Museum of Contemporary Art Detroit. The 20 color and black-andwhite photographs will be printed in Italy as postcards and distributed in the U.S. Pavilion during the 2016 Architecture Biennale in Venice, which is May 28 to Nov. 27. Among the winners is Sara Jane Boyers, 70, a Santa Monica, Calif.based fine art freelance photographer and writer. She took her shot of Lafayette Park last March from a bedroom in the 1300 Lafayette East cooperative. She was in Detroit as part of a five-year project called Detroit: Definition, which involves retracing the steps of her father, who lived and worked in the city. Boyers was born in Detroit, but the family moved when she was a year old. The photo Boyers shot was also the image selected by The Detroit Homecoming for the cover of the official 2015 Homecoming program. Jon DeBoer, 27, a Royal Oak-based freelance photographer and graphic designer, won for his black-andwhite shot of Detroit’s skyline at night. Ten of the 18 winners are Detroit-area residents.

but special additions like the VIP sponsor reception, the NVGAG Health and Wellness Expo and the opening ceremony concert will be paid for by sponsors. The concert will feature Motown Records’ Temptations and a special guest to sing the national anthem. Sponsors include Ford Motor Co., American Legion, Disabled American Veterans, Masonic Association of America and Xerox. Browning said Ford’s contribution was between $10,000 and $20,000. Browning added that the city was not an easy sell to competitors when it was announced during last year’s games in Omaha, Neb. “We were at the Omaha games this past summer talking to competitors, and there was hesitation because of the news concerning the city around the country,” Browning said. “We were able to convince many people, as we just crossed 900 registered participants two days ago. We are set to only allow 800 to compete here, so we are cutting off registration sooner than we thought in the middle of March. However, we are leaving some open slots for local folks.” All events will be open to the public and held in a variety of locations, including Cobo Center, Belle Isle, Wayne State University and Thunderbowl Lanes in Allen Park. Browning said the local economic impact is expected to be around $3.5 million.

Vets Golden Age Games to draw hundreds

䡲 The National Association of Women Business Owners Greater Detroit Chapter has named its annual

Detroit VA Healthcare System and the Veterans Canteen Service will bring competition and soul to the Motor City this summer during the 30th annual National Veterans Golden Age Games July 10-14. The sports competition is expected to attract more than 800 veterans age 55 and older from across the U.S. who receive health care through a veteran affairs facility. The goal is to promote health among aging veterans through therapeutic sports. “Therapeutic sports is supported by evidence to improve health as well as physical competition,” said Detroit VA Volunteer and Community Relations Chief Bill Browning. The games are paid for by the VA,

Mary Kramer: Crain’s Group publisher

Top 10 Michigan Business Women Awards and will honor the winners at a ceremony March 17. Winners included Crain’s Group Publisher Mary Kramer (Greater Good Award); Lisa Lunsford,

founder and CEO, Global Strategic Supply Solutions (Rainmaker Award); and Jennifer O’Brien, founder and president, Accounting Business Solutions (Pinnacle Award). For more information on the event, visit nawbogdc.org. 䡲

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