DEALMAKER OF THE YEAR

Why Martin Stein Is The Acg Dealmaker Of The Year

Martin Stein, founder and managing director of Blackford Capital in Grand Rapids, was 29 years old when he acquired his first company, Quality Imaging Products in Los Angeles. He sold what was a remanufacturer of toner cartridges four years later for a healthy profit.

After several more transactions in the aftermarket imaging supply sector, the Pontiac native returned to his home state and set up operations in Grand Rapids, where he opened Blackford Capital in 2010. “I noticed right away there wasn’t a lot of M&A activity, but slowly yet surely investors came together and the industry became larger,” Stein says.

Part of dozens of deals while working in California, the marathon cyclist long desired to raise the stature of middle-market private equity activity in his home state.

Today, Blackford Capital operates seven portfolio companies that, combined, generate more than $550 million in annual revenue. That’s all part of a career that spans more than 50 acquisitions, investments, recapitalizations, and exits that together are worth $750 million in transaction value.

“The team we have at Blackford combines strategy and culture, but we always say culture beats strategy on any given day,” Stein says. “We work closely with our portfolio companies and ensure we position them to prosper, regardless of what happens. That comes from the glue we have working as

UNDER $50M a team. We feel good about what we do, and that translates across what we see across the state. We may not be as big as New York, Los Angeles, or Chicago, but Michigan is growing and punching above its weight.”

Experience helps, as well. When Blackford Capital’s portfolio company, Aqua Leisure, acquired INYO Pool Products in April 2022, Stein was in his element, having been active in the outdoor recreation space. Aqua Leisure, which was purchased in January 2021, also acquired Airhead Sports Group, a leader in marine towable watersports and winter leisure products.

“We were selling to brick and mortars like Costco, Amazon, and Walmart, but we had a very strong presence online,” Stein says. “After we added INYO, we assessed everything post-COVID-19, from what would happen with remote work to what was going on in the global supply chain, and much more.”

To streamline deliveries from southeast Asia, Blackford Capital relied on its 50-employee team at Greyland Trading Ltd. in Hong Kong. “We worked together to make sure we had the supplies we needed, that we made the products in an efficient manner, and we made sure the products were shipped on time,” Stein says. “We even manage the inventory when it’s on the water. As a result, we now have a 99.5 percent successful shipping rate.”

WHY AMERICAN ADVENTURE HOLDING’S ACQUISITION OF OCEAN CANYON PROPERTIES IS THE ACG DEAL OF THE YEAR UNDER $50M

When American Adventure Holdings in Bay City, which owns and operates RV resorts, sought to acquire a competitor three years ago, they didn’t expect the transaction would be so challenging.

Consider the lead financial institution for the acquisition, Frankenmuth Credit Union — which had an existing relationship with American Adventures — was joined by 27 other credit unions and two banks. To help shepherd the transaction to the finish line and allow the management team to oversee the due diligence while running the business, Element 22 was named a deal adviser.

As the financing was being lined up, one of the stakeholders of Ocean Canyon, which operates eight RV Resorts in the South, passed away. “Once the stakeholder’s family settled the estate, they returned to the deal,” says Jason King, CEO of American Adventures. “In addition, some of the parks we were acquiring were located in hurricane alleys, and some had sustained damage, so we had to negotiate the anticipated repair value.”

In turn, the lenders required individual appraisals of the 17 resort properties owned by the two enterprises. “That takes time, because you have to find a specialized appraiser,” King says. “We also had to deal with some environmental issues with the Tennessee Valley Authority and the Army Corps of Engineers, which we were able to do successfully.”

While the cost of the acquisition is private, King says the complexity of working with multiple lenders and properties required a well-organized team that today operates resorts in Michigan, Alabama, Texas, Oklahoma, Missouri, Louisiana, and Arkansas. Overall, there are 3,396 camp sites and rental accommodations offered in multiple resort settings for 27,000 members, many of whom own their own RV.

It helped that King had plenty of institutional knowledge. His grandfather, John, built up an RV resort business that he later sold, while his father, Greg, opened the first Outdoor Adventure park in Standish, near Saginaw, in 1995 (American Adventure is the parent company).

One benefit since the deal for Ocean Canyon closed in May 2022 has been a bump in local tourism. “We’re bringing people to Michigan who otherwise might not have come here,” says Adam Webber, CFO of American Adventures. “When it’s hot and humid in the South, our members can travel north and enjoy our summer weather.

“When you come to one of our properties, you can pop up a tent and have a campfire, park and set up your RV, or rent a frame cabin. There’s indoor and outdoor pools, lakes, hiking trails, and all kinds of activities for kids. Plus, they can make new friends. We offer everything from rustic to glamping experiences.”