The Riverside Company, a Cleveland-based private equity firm, recently purchased Waukesha-based GTI Diagnostics, which designs and manufactures specialty test kits used in the blood testing industry. GTI Diagnostics was formerly owned by the Blood Center of Wisconsin Research Foundation.

The company’s test kits are sold to some of the most well-respected hospitals, research institutions, blood banks and reference labs in the U.S. and around the world. There are 400 labs around the world using more than 20 GTI test kit products. In producing its products, GTI sources specialized blood components, isolates and purifies a variety of proteins that are used to create proprietary and complex test kits.

Terms of the acquisition were not disclosed. "There are dynamic growth opportunities in the blood center industry," said Scott Gilbertson, principal of origination for new Midwestern investment opportunities for The Riverside Company. "There is a need (in the clinical setting) to provide patient bases that diseases are not being passed."

No GTI Diagnostics employees will be affected by the acquisition, Gilbertson said. Jim Tidey, GTI's founder and CEO, will continue with the firm and has become an investor in the company. "The company is healthy and it's a growing organization," Gilbertson said. "We'll look to support the company and will look to staff up where necessary."

The Riverside Company owns several other health care and medical investments, Gilbertson said. GTI is the firm's fourth portfolio company in metro Milwaukee and its seventh in Wisconsin. "We are the most active (private equity) investor in the state," Gilbertson said. "And we will continue to look for opportunities in Wisconsin."

Commercial and residential loan demand in Wisconsin is flat and predicted to either stay that way or decline further in the next six months, according to the latest Wisconsin Bank CEO Economic Conditions Survey. The survey is conducted twice per year by the Wisconsin Bankers Association (WBA).

Weakened loan demand, coupled with increased delinquencies, foreclosures and past due payments led to 65 percent of the 124 bank CEOs who completed the WBA survey to conclude that the Wisconsin economy is still weakening. By contrast, only 35 percent said the Wisconsin economy is improving.

Overall, 61.5 percent of Wisconsin bank CEOs rate the current health of the Wisconsin economy as "fair," 35 percent say it is "good" and 3.4 percent rate the economy as "poor."

This is the lowest rating bankers have given statewide economic conditions since WBA began its biannual survey in 2005. By comparison, in January, 52 percent of bank CEOs surveyed rated statewide economic conditions as "good."

Bankers were a little more optimistic about localized economic conditions. Fifty percent rated the current health of their local economy as "good," but just 6 percent believe that their local economy will grow in the next six months, while 38.4 percent say it will weaken and 55.5 percent said local conditions will stay the same.

"From loan demand to the employment forecast, Wisconsin bankers are pessimistic about almost every measure of the state's economy," said Kurt Bauer, president and chief executive officer of the WBA.

Commercial loan demand: Just 6 percent of bank CEOs predict that demand for commercial loans - a key measure of economic vitality - will increase between now and the end of the year. Twenty-seven percent said demand will drop, while 67 percent said it would stay at current levels. Bankers are even more pessimistic about demand for commercial real estate loans. Just under 50 percent believe demand will decline through the end of 2008, while 4 percent believe demand will increase.

Residential loan demand: A little over 63 percent of survey respondents believe demand for residential loans will stay at current levels, while 22 percent said demand will decline. Only 14.4 percent said demand for home mortgages will increase during the final two quarters of 2008.

Interest rates: Last January, 45 percent of bank CEOs predicted that long term interest rates for mortgages would drop during the first six months of 2008. Today, less than 1 percent says those rates will decline, while 54 percent said they will rise during the next six months. The Federal Open Market Committee’s (FOMC) attempts to revive the slumping housing market through historic cuts in benchmark interest rates has come to an end, according to Wisconsin bankers. When asked if the FOMC will lower rates again before the end of 2008, 80 percent of bank CEOs answered “no.” Over 15 percent of respondents said they believe the Fed will raise rates during the next six months.

Foreclosures, bankruptcies and past dues: Fifty-two percent of bankers reported increases in customer bankruptcies during the first six months of the year, up slightly from 45 percent in January. Similarly, 48.2 percent of bankers said the number of customer home foreclosures increased, the same percentage as six months ago. More than 55 percent of bank CEOs reported increases in residential mortgage past dues (payments that are 30 days or more late). That is up from 49 percent in January.

Employment: More Wisconsin businesses will lay-off workers by the end of the year, according to the economic survey. Over 25 percent of bank CEOs said that businesses in the markets where they do business will reduce the number of employees. That is up from 11 percent in January. Sixty-nine percent of bank CEOs said most businesses will maintain current staffing levels, and 5 percent said businesses will hire employees.

Slowed economic activity will impact the banking industry’s employment picture as well.  More than 9 percent of the 124 banks participating in the survey say they have laid off employees in the last six months and 11 percent said they anticipate eliminating positions before the end of they year.

Financial crimes: The percentage of bank CEOs reporting an increase in all forms of financial crimes targeting financial institutions and their customers dropped from 53 percent in January to 26 percent in June.

The Wisconsin Bankers Association is the state’s largest financial industry trade association, representing 300 commercial banks and savings institutions, their nearly 2,300 branch offices and 28,000 employees.

ARI Network Services Inc., a Milwaukee provider of technology-enabled business solutions that connect equipment dealers, distributors and manufacturers, recently acquired certain assets of Info Access, the micropublishing division of Eye Communications, Inc., of Hartland. Terms of the transaction were not disclosed.

"We are very pleased to add many of the employees and the customers of Info Access to the ARI family," said Brian E. Dearing, ARI’s chairman and chief strategy and corporate development officer. "We are committed to continuing to provide the stellar service and support that manufacturers like Whirlpool, Maytag, Electrolux, LG, U-Line, and Viking and their distributors and service agents have come to expect. We also look forward to expanding our presence in the appliance industry with additional offerings, including our award-winning marketing services."

Dearing said that the acquisition is expected to add more than $1 million in profitable revenue to ARI and is expected to be accretive to revenue and income per share within the first year. Nine Eye Communications employees will join ARI, including Donald E. Grice, general manager of the micropublishing unit.  For more information on ARI, visit www.arinet.com.

Pentair and GE Water will create joint venture in Milwaukee
Pentair Inc. and GE Water & Process Technologies, a unit of the General Electric Co., announced they will locate the global headquarters of their drinking water quality joint venture business in the Milwaukee area. The companies will combine Pentair's global water softener business with GE's residential water filtration business.

Golden Valley, Minn.-based Pentair and Trevose, Pa.-based GE Water & Process Technologies both already have some operations in the Milwaukee area. GE spokeswoman Ellen Mellody said she could not be more specific about the location of the joint headquarters or how many jobs would be created in southeastern Wisconsin.

Under the terms of the agreement, Pentair has an 80-percent ownership stake and GE has a 20-percent stake of the joint venture, which will be called Pentair Residential Filtration.

With the formation of the joint venture, Pentair and GE will be better-positioned to serve residential customers with industry-leading technical applications in the areas of water conditioning, whole house filtration, point-of-use water management and water sustainability, said Randall Hogan, chairman and chief executive officer of Pentair.

"Further, this joint venture advances Pentair's current residential filtration strategy for growth. We believe we will accelerate revenue growth by selling GE's existing residential conditioning and treatment products through Pentair's sales channels, and by gaining access to some of GE's current and emerging filtration technologies," Hogan said.

In 2007, the combined residential and commercial net sales of the parent companies were approximately $450 million USD. "We are excited about the growth opportunities this unique partnership brings our business," said Jeff Garwood, president and CEO of GE Water & Process Technologies. "Partnerships such as this one create an excellent opportunity to develop and introduce new technologies that will meet the needs of both developed and emerging markets. It is also another example of how GE continues to partner with industry leaders to drive growth while meeting the world's most pressing water needs."

Pentair Residential Filtration will serve as the primary sales channel for Pentair's and GE's respective global residential water filtration and water softener businesses. It will also serve as the manufacturing arm for residential and commercial tanks, valves and some limited filtration products for the parent companies.

Pentair and GE will continue to serve existing municipal, commercial and industrial water treatment customers separately, sourcing select products from the joint venture as needed.

Pentair Residential Filtration will bring together approximately 1,100 employees from Pentair and GE in 15 facilities in the United States, Europe and China. The joint venture coming to southeastern Wisconsin is another win for the region's growing identity as the "Silicon Valley of water technology." The Milwaukee 7 and Milwaukee Mayor Tom Barrett are promoting the region as the "Fresh Coast."

"It's absolutely true that there is a growing need around the world in advanced drinking water quality," Mellody said. "Water scarcity is increasing. Water quality is decreasing."

Chicago investors acquire Midland Container
Chicago-based Arbor Investments has completed its acquisition of Midland Container Corp. in Franksville, Wis. Midland produces value-added corrugated packaging and display products. In conjunction with the acquisition, Arbor operating partner Sieg Buck, a former senior executive for Newell-Rubbermaid, has been named chief executive officer of Midland. The current management team will continue in their respective roles with the company.  Financial terms of the acquisition were not disclosed.

Founded in 1947 by the Gerlach family, Midland manufactures corrugated shipping containers, custom-designed industrial packaging and full-color point-of-purchase displays.  The company also provides an array of value-added services in structural design, front-end creative design, just-in-time (JIT) inventory management, packout and fulfillment.

"We are excited to be acquiring a company the caliber of Midland Container," said Arbor vice president Richard Boos. "Midland's outstanding reputation as a market leader in product quality and service provides the ideal foundation for accelerating the Company's growth."

Arbor Investments is one of the only private equity firms in North America that solely invests in the food, beverage and related industries. The firm has $236 million of capital under management across two private equity funds. Boos said Arbor anticipates future growth for Midland. "Employees and facilities will grow with the company," Boos told SBT. "We feel that it’s a great platform for growth.”

Midland Container represents Arbor's second investment in a Wisconsin-based company.  Previously, Arbor owned and then sold its interests in Mexican Accent Inc., the manufacturer of Manny's branded tortillas, located in New Berlin. Arbor remains interested in making investments in other Wisconsin companies, Boos said. "We’re always interested in something nearby, given our location in Chicago," he said. "And the area (Wisconsin) is a big interest. It's got a lot of food and beverage (companies)."

"Our partnership with Arbor will be a tremendous asset to the company going forward" said John Grow, chief operating officer of Midland. "Arbor brings a full complement of strategic, financial and operational resources to bear as we seek to build on our historically strong presence in the food and beverage packaging segment."

Fiserv to shed insurance businesses
Fiserv Inc., Brookfield-based provider of information technology services to the financial and insurance industries, has signed a definitive agreement to sell 51 percent of its interests in its insurance businesses to Trident IV, a private equity fund managed by Stone Point Capital LLC. Trident will invest approximately $205 million in equity and $335 million in debt in the transaction.

Fiserv expects to receive approximately $510 million in net after-tax proceeds and to retain a 49 percent equity interest in Fiserv Insurance Solutions. The transaction is anticipated to close in July, subject to regulatory approval and other customary closing conditions.

The transaction will include nearly all aspects of Fiserv's insurance segment. The current management team and employee base will continue with the company, which will be known as Fiserv Insurance Solutions Inc.

“Stone Point Capital brings a proven track record of insurance industry success that we believe will accelerate the growth opportunities for Fiserv Insurance Solutions and its clients," said Jeffery Yabuki, president and chief executive officer of Fiserv. "Within Fiserv, we are able to free up capital, maintain an interest in Fiserv Insurance Solutions that should increase in value, and intensify our focus on delivering products and services within the broad financial services and payments landscape."

"We are delighted to partner with Fiserv and the management team of Fiserv Insurance Solutions," said Chuck Davis, CEO of Greenwich, Conn.-based Stone Point Capital. "Fiserv Insurance Solutions is a leading player in the insurance technology and outsourcing space. We believe there are a number of exciting growth opportunities for the business, and we look forward to working with the Fiserv Insurance Solutions management team to pursue these growth initiatives as an independent company focused on serving the insurance marketplace. We are also pleased that Fiserv will be continuing its involvement, through a significant minority ownership position, which we believe will further enhance the company's prospects for success."

"Stone Point Capital's business philosophy and culture match our own," said Mark Damico, president and CEO of Fiserv Insurance Solutions. "The entire Fiserv Insurance Solutions management team is excited to go to market with a partner with deep insurance sector expertise. Stone Point Capital recognizes our commitment to employees as well as clients and, through our partnership, we will continue to provide innovative solutions for years to come."

Fiserv expects slight 2008 earnings dilution of less than 1 percent, or 2 to 3 cents per share. In a related action, the Fiserv board of directors authorized the repurchase of up to an additional 10 million shares of Fiserv common stock, or approximately 6 percent of its outstanding shares. The company has completed its previous repurchase authorization.

"We continue to view share repurchase as an important element in building shareholder value through capital allocation," Yabuki said. "Our strong free cash flow combined with significant proceeds from dispositions in 2008 allows us to meet our debt commitments and to repurchase shares under this new authorization."

West Bend mutual banks to merge
West Bend Savings Bank and Continental Savings Bank, two mutual community banks, jointly announced the companies will merge to create a new Wisconsin bank with more than $650 million in combined assets and 27 locations serving southeastern Wisconsin. A name for the new bank will be determined upon completion of the merger.

"It's a very proud day for both organizations," said Jim Podewils, president of Continental Savings Bank. "This is the first merger between two mutual savings banks in Wisconsin in over eight years. This partnership will allow us to offer a greater depth of products and services to our customers, while allowing us to retain our community philosophy of friendly customer service."

Ray Lipman, chief executive officer of West Bend Savings Bank, said, "This is a wonderful opportunity for both banks. When Jim and I began meeting in February 2007, we quickly saw the advantages that this combination provides to both organizations."

Upon completion of the merger in late 2008, the combined bank headquarters will be located in West Bend, while the bank will maintain a regional office in Greenfield. Lipman will become chairman and CEO and Podewils will be president and chief operating officer. Current employees and officers of both institutions will retain their employment with the new bank. West Bend Savings Bank was formed in 1926 and has 18 branches.

Continental Savings Bank was formed in 1914 and seven branches, including East North Avenue, Lincoln Avenue and West Villard Avenue in Milwaukee, as well as offices in Brookfield, Brown Deer, Hales Corners and Mukwonago.

Developer gets grant for Kenosha apartment project
Silverstone Partners Inc. will receive a $409,500 Blight Elimination and Brownfield Redevelopment (BEBR) grant from the Wisconsin Department of Commerce to help it redevelop an unoccupied and underutilized property in Kenosha County. Silverstone Partners plans to construct a four-story apartment building containing 89 units on a one-acre parcel located at the intersection of Seventh Avenue and 51st Place in Kenosha.

The company will use the BEBR funds to address soil contamination on the site, which was formerly occupied by a tannery. An estimated 80 of the 89 living units will be priced as affordable housing targeted for seniors. The total project cost is $8.5 million. "Brownfield grants help renew damaged or vacant land and provide communities with opportunities for additional reinvestment," said Wisconsin Gov. Jim Doyle. "I'm pleased that we could help Silverstone Partners Inc. improve the local supply of rental units, particularly for senior citizens."

The Department of Commerce BEBR Program provides grant funds to municipalities, local development corporations, and the private sector to support assessment, remediation and return of contaminated lands to productive use. Brownfields are abandoned, idle, or underused industrial or commercial properties where redevelopment is hindered by real or perceived contamination. For more information about the BEBR Program, contact Al Rabin at (608) 267-8926.

Milwaukee Rotary Club donation will create arboretum 
The Milwaukee Rotary Club will donate $400,000 and leverage more than $3 million in private gifts and public funds to create the Rotary Centennial Arboretum, the gateway to Milwaukee Central Park. The funds will be donated to the Milwaukee Urban Ecology Center and the River Revitalization Foundation An arboretum is a dedicated area planted with many types of trees for study, display and preservation.

Milwaukee Rotary Club president James T. Barry III planned to announce today that the club will make the donations to commemorate its 100th anniversary in 2013. "I am very pleased that Rotary will celebrate its centennial anniversary with a contribution that will dramatically enhance the riverfront and the community - a contribution that is in keeping with our strong history of community giving," Barry said. The Rotary Centennial Arboretum will be located near the Milwaukee River west of the Urban Ecology Center, south of Riverside Park and north of North Avenue.

The arboretum - the first official arboretum in the Milwaukee metropolitan area - will be developed on 4.5 acres of land showcasing native trees of Wisconsin. A Rotary Gate will mark passage into the arboretum, providing a symbol of the club's commitment to the city, the preservation of natural environments and to the education of children and the community about the critical need to care for natural resources, Barry said.

Ken Leinbach, executive director of the Urban Ecology Center, said, "We are thrilled to partner with the Rotary Club of Milwaukee and the River Revitalization Foundation and Milwaukee County Parks on this once-in-a-lifetime opportunity to convert old industrial land along the revitalized Milwaukee River into a natural jewel for the city - a living forest classroom that our grandchildren will be able to enjoy and share with their grandchildren many generations to come."

The Rotary Club of Milwaukee also announced today a $100,000 donation to the Greater Johnsons Park Initiative, located in the vicinity of Fond du Lac Avenue and Brown Street.  A 2002 Public Policy Study rated Johnsons Park as the least desirable of all the parks in Milwaukee County - in an area "very underserved" with green space, according to the club.

Fundraising campaign launched for boarding school
Business leaders joined a contingent of local government, philanthropic and educational advocates recently to launch the Wisconsin Coalition for a Public Boarding School. The coalition, which gathered at the Charles Allis Art Museum in Milwaukee, is calling upon state legislators and Gov. Jim Doyle to make a commitment to funding new educational options for at-risk children in the next legislative session.

The proposed school would be built with $30 million to $40 million raised in a capital campaign from private sources, and open in 2011 with a minimal initial state contribution, which would ramp up over six years and reach full funding in 2017. The coalition is calling upon the state legislature to eventually commit $10 million a year to support education and boarding costs for a 400-student school. The proposed SEED school would house students on campus from Sunday night through Friday afternoon.

"Every student can succeed in a college-prep environment," said Jeanette Mitchell, community advisor to The SEED Foundation, a Washington, D.C.-based nonprofit co-founded by a Milwaukee native, which is working with the Milwaukee Boarding School Foundation to bring a public, urban boarding school to Wisconsin. "The broad-based coalition here today shows the incredible range of support we have for bringing a SEED School to southeastern Wisconsin."

Founded by the late philanthropist Marty Stein, the Milwaukee Boarding School Foundation was created prior to his 2006 passing to realize the vision of an educational option for Milwaukee children who need environmental change to succeed. The SEED Foundation has operated the SEED School of Washington, D.C. for ten years and has seen 97 percent of its graduates go on to four-year colleges. "The children in our most challenged neighborhoods need this option, and if we plan ahead, and make it a priority, we can get this done," said Milwaukee Mayor Tom Barrett.

"We need fresh, solid ideas like a SEED school to help meet the challenges faced by our citizens every day," said Milwaukee Common Council President Willie Hines. "We all know that it's not just what happens within the four walls of the school that makes it possible for kids to succeed. For some kids, being in a school/dorm environment might be an option that is best for them - and we need to do what's best for the kids."

University of Wisconsin-Milwaukee chancellor Carlos Santiago and Alverno College president Mary Meehan also are supporting the initiative. "This is an idea whose time has come, and it deserves our support," Santiago said. "One thing about the SEED model that is so impressive is the commitment from the day a student enters to seeing that student not only graduate from high school, but to graduate from college," Meehan said.

Former national school principal of the year, Janie Hatton of Milwaukee also endorsed the concept. "The home lives of some kids in Milwaukee, and in other parts of the state, would make you cry," Hatton said. "An option where they could get into a stable environment five days a week, would make all the difference in the world. We should bring a SEED school to Wisconsin."

Philanthropist Dan Bader represented the Milwaukee Boarding School Foundation at today's launching event. "The Milwaukee Boarding School Foundation is going to ensure that the private commitment to build a school is met," Bader said. "We need the state to step up to the plate and make a public commitment as well."

"Our community needs to get behind this," said attorney Cory Nettles, former Wisconsin Secretary of Commerce. "If we focus on solutions, we can stand united for new, creative solutions." Twenty-five organizations and 50 prominent individuals were announced as charter members of the coalition. More information is available at www.wisconsinboardingschool.com.

Businesses support new IRS gas deductible rate
The U.S. Internal Revenue Service recently today announced an increase in the optional standard mileage rates for the final six months of 2008. Taxpayers may use the optional standard rates to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

The rate will increase to 58.5 cents a mile for all business miles driven from July 1, 2008, through Dec. 31, 2008. This is an increase of eight cents from the 50.5-cent rate in effect for the first six months of 2008.

The optional business standard mileage rate is used to compute the deductible costs of operating an automobile for business use in lieu of tracking actual costs. The rate also is used as a benchmark by the federal government and many businesses to reimburse their employees for mileage.

The IRS made the special adjustment for the final months of 2008 in recognition of recent gasoline price increases. The IRS normally updates the mileage rates once a year, in the fall, for the next calendar year.

"Rising gas prices are having a major impact on individual Americans. Given the increase in prices, the IRS is adjusting the standard mileage rates to better reflect the real cost of operating an automobile," said IRS commissioner Doug Shulman. "We want the reimbursement rate to be fair to taxpayers."

While gasoline is a significant factor in the mileage figure, other items enter into the calculation of mileage rates, such as depreciation, insurance and other fixed and variable costs.

The new six-month rate for computing deductible medical or moving expenses will also increase by eight cents to 27 cents a mile, up from 19 cents for the first six months of 2008. The rate for providing services for charitable organizations is set by statute, not the IRS, and remains at 14 cents a mile.

Dan Danner, executive vice president of the National Federation of Independent Business (NFIB), the nation's leading small business association, said his organization is supporting the deductible rate increase.

"NFIB is very pleased with the IRS' decision to increase the standard mileage rates for businesses from the 50.5 cent rate to 58.5 cents. This increase will help small business owners nationwide that depend on using vehicles to support their businesses.  According to a recent NFIB study, the cost of energy ranks as the second most troubling problem for small business owners, and therefore this increase will undoubtedly help many business owners struggling to afford record high gas prices," Danner said. "NFIB applauds the IRS for acting in a timely manner to do something that will immediately help American small business owners. Additionally, NFIB commends Sen. Norm Coleman (R-Minn.) and Congressman Brad Ellsworth (D-Indiana) for urging the IRS to increase the standard mileage rates for businesses. Small business owners, the nation's job creators, will greatly appreciate this money saving initiative."