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Hatching a business: Startups learn to fly in challenging environment
July 27, 2015 10:49 AM
The path to starting a business can be long and winding, and the journey grueling, but several local organizations are trying to make it easier for entrepreneurs to start companies and create more jobs. A growing number of incubators, accelerators and startup communities have popped up in the Milwaukee area over the past five years, in an effort to pool resources to send startups on their way to success.

Read more in the cover story of the latest issue of BizTimes Milwaukee.

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Magnetek to be acquired by Columbus McKinnon
July 27, 2015 10:46 AM
Menomonee Falls-based Magnetek Inc. has entered an agreement to be acquired by Amherst, NY-based Columbus McKinnon Corp. for about $189 million.

Magnetek, which has about 340 employees, manufactures digital power and motion control systems used in applications including material handling, elevator, mobile hydraulic and mining. It is one of North America’s largest independent digital drives, radio controls, software and accessories suppliers for industrial cranes and hoists, and has counted Columbus McKinnon as a customer.

Columbus McKinnon manufactures material handling systems used to lift, position and secure materials. The company would acquire all the shares of Magnetek’s common stock for $50 cash per share under the agreement. Upon completion of the deal, Magnetek would become a wholly owned subsidiary of Columbus McKinnon.

According to the companies, the acquisition will combine their complementary assets to develop broader and more competitive material handling solutions. Both companies’ boards of directors have approved the transaction, and Magnetek’s board has urged shareholders to tender into the offer, which is expected to occur on or before Aug. 5.

“The accretive combination of Magnetek’s technology and ‘smart power’ with our broad line of lifting and positioning mechanical products creates a total solution for our customers,” said Timothy Tevens, president and chief executive officer of Columbus McKinnon. “We believe Magnetek’s technology will enable the industrial world to continue to advance productivity and safety beyond what mechanical solutions alone can offer. Strategically, this acquisition provides an ideal adjacent capability for us to continue to supply our customers with best in class material handling solutions.”

“Our technology and products are a perfect complement for Columbus McKinnon’s products and this compelling combination provides a platform to accelerate growth for both Magnetek and Columbus McKinnon,” said Peter McCormick, Magnetek’s president and CEO. “Our companies have a strong commitment to quality and service and have excellent reputations in the markets we serve with very similar corporate cultures. Importantly, our strong and dedicated team will contribute to what I believe is a formula for success.”

McCormick will remain on board to continue to lead the Magnetek subsidiary and to aid in the integration.

The transaction is expected to close by Sept. 30. The companies expect the combination to result in at least $5 million of cost synergies in the first full year.

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Chicago real estate firm to buy 250 Plaza office building downtown
July 27, 2015 10:52 AM
Chicago-based real estate investment firm Fulcrum Asset Advisors LLC has a contract to purchase the 20-story 250 Plaza office building in downtown Milwaukee, according to commercial real estate sources. The sale is expected to close this week, according to one source.

Located at 250 E. Wisconsin Ave., the 193,031-square-foot 250 Plaza building was constructed in 1973 and has struggled in recent years with a high amount of vacancy. The building’s current occupancy rate is just 31.6 percent, according to one source.

The building was acquired by Lone Star Funds in 2013 for $7.5 million, after the building had gone into receivership in 2009. Its current assessed value is about $7 million, according to city records.

Sources say the building needs significant renovations. But if improved, they say the new owner could take advantage of the building’s Wisconsin Avenue location and attached parking structure.

“It’s got everything going for it,” one source said. “It just needs a little TLC.”

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German manufacturer moving sales, service facility to Racine County
July 27, 2015 11:09 AM
The Racine County Economic Development Corporation announced that a German hand tool manufacturer is locating a regional sales and service facility into the Town of Yorkville's Grandview Business Park.

This marks the second German manufacturing company Racine County has secured as a result of its foreign direct investment and international recruitment activities.

Stahlwille Tools LLC, based in Wuppertal, Germany, designs and manufactures hand and special-purpose tools for the aerospace, energy generation, transportation and general trade industries. It plans to begin operating out of its Town of Yorkville facility by the end of September.

“Once again, Racine County’s strategic position in the center of the Chicago-Milwaukee Corridor played a role in attracting a new business to Racine County,” said Racine County Executive Jonathan Delagrave. “RCEDC’s commitment to attracting foreign direct investment continues to add to our growing economy and concentration of foreign-owned companies that call Racine County home.”

Stahlwille’s decision to move a facility to Racine County came in the spring when Gov. Scott Walker, the Wisconsin Economic Development Corporation, the Milwaukee 7 and the RCEDC attended Hannover Messe, the world’s largest industrial trade show located in Hannover, Germany.  

A Stahlwille representative attended a breakfast hosted by the Wisconsin delegation, and shared the company’s plan to locate a sales and distribution office in the Chicago area.

The RCEDC helped Stahlwille establish business bank accounts, secure a residence in Racine County, obtain proper insurance and operating permits, and negotiate a lease agreement.   

“The decision to locate in Racine County was made based on a number of key factors,” said Frank Hansen of Stahlwille. “Stahlwille’s management team was interested in a location in northern Chicago due to a large pool of potential customers in the market. After researching differences in taxes, labor laws, financial outlooks and more, the company decided to seek a location in Wisconsin instead.”

He said the final decision to select southeastern Wisconsin was due to meeting with Gov. Walker; Jim Paetsch, M7’s vice president of corporate attraction and expansion; and Logan Dawson, an RCEDC representative.

“In the end, we’re glad we made the choice. We found a very good location to start the business and with a lot of help of the RCEDC and especially Mr. Dawson, our transition was quite easy,” Hansen said.

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City officials choose 10-story apartment development for downtown riverfront site
July 27, 2015 11:07 AM
Milwaukee Department of City Development officials have selected a 10-story apartment development proposed by Klein Development Inc. for a vacant site at 1027 N. Edison St. on the Milwaukee River downtown.

In March the city issued a request for proposals seeking development proposals for the vacant half-acre site on the east side of the river. The northern portion of the site has major communication lines underground and a sidewalk providing access to a pedestrian bridge. Therefore only the southern half of the site is considered easily develop-able.

In response to the RFP, Klein Development proposed a $15 million, 10-story building with 72 luxury apartments and 4,500 square feet of restaurant space on the ground floor. The project includes an extended Riverwalk and preserves access to the Highland Street pedestrian bridge. An urban greenspace would be on the north end of the site.

DCD’s selection of the project is subject to review and approval of the full Common Council.

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Mixed-use development planned for former Parkland Mall site in Muskego
July 27, 2015 11:33 AM
Greenfield-based Ener-Con Companies Inc. is planning a $33 million, mixed-use development at the long-vacant former Parkland Mall site in Muskego.

The plans include three retail buildings with a total of 54,000 square feet of space and three condominium buildings, with a total of 99 units, with a park space in the middle of the site. The firm is seeking $6.73 million in tax incremental financing assistance from the city for the project.

The 11-acre site at S74 W17000 Janesville Road has been vacant since the former Parkland Mall was torn down in 1999. The site sits at a key location in the heart of Muskego’s main commercial corridor.
Art Dyer, the previous owner of the property, controlled the site for years until finally losing it earlier this year in a foreclosure action. Ener-Con has a contract to purchase the site from its current owner, Illinois-based Muskego Adventures Inc.

Ener-Con’s plans for the site include three retail buildings, a 30,000-square-foot building, a 14,000-square-foot building and a 10,000-square-foot building, along Janesville Road. The condo buildings would be four stories tall and would be located along Lannon Drive.

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Downtown Employee Appreciation Week gets underway today
July 27, 2015 11:58 AM
Milwaukee will rally around its downtown workforce this week as it celebrates “Downtown Employee Appreciation Week” with special events, office challenge games, giveaways and discounts.

The week, which runs today through Friday, acts as a thank you to downtown employees and businesses who help power Milwaukee’s economy.

Appreciation week festivities kicked off this morning with an opening ceremony in Red Arrow Park just before noon, followed by free lunch for the first 1,000 employees. Today’s lunchtime giveaways include mini subs and chips from Cousins Subs, brat sliders from Davians Catering, ice coffee samples supplied by Starbucks, and chocolate chip cookies courtesy of DoubleTree by Hilton.

The week’s series of office challenge games also started today. The games, presented by Associated Bank, will run each day from 11:45 a.m. to 1:30 p.m. at venues across the city – Red Arrow Park today, Pere Marquette Park on Tuesday, Schlitz Park on Wednesday, Zeidler Union Square on Thursday, and Cathedral Square Park on Friday. Games will include Corn Hole, Spin-to-Win and a Bucks Basketball Shootout.

Additionally, this year’s Appreciation Week lineup of activities includes a corporate volleyball tournament and a passport program in which employees who get an Appreciation Week passport stamped at three or more activities can enter to win downtown prizes.

Employees are encouraged to wear a paperclip all week to show that they are downtown employees. Their paperclip will function as their ticket for the week’s discounts and giveaways.

For more information on Downtown Employee Appreciation Week, which is organized by Milwaukee Downtown, BID #21, visit www.milwaukeedowntown.com/iworkdowntown.

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Waterstone Financial reports higher profit on mortgage loans
July 27, 2015 11:15 AM
Wauwatosa-based Waterstone Financial Inc. has reported second quarter net income of $5.3 million, or 17 cents per share, up from $3.8 million, or 11 cents per share, in the second quarter of 2014.

The Mortgage Banking segment drove the increase, with net income of $2.9 million in the second quarter, up from $1 million in the second quarter of 2014. Loans originated for sale on the secondary market increased $23.6 percent in the quarter.

Past due loans decreased by $3 million, or 11.2 percent, to $23.7 million by the end of the second quarter. Total loans were $1.1 billion, flat from the same period a year ago.

"The momentum of our Mortgage Banking growth continued into the second quarter wherein the division originated a record number of new purchase loans," said Douglas Gordon, president and chief executive officer. "Loan growth in our Banking segment was also very strong and nonperforming assets continue to decline, strengthening our balance sheet."

The parent company of WaterStone Bank had total assets of $1.7 billion in the quarter, down from $1.8 billion in the second quarter of 2014.

WaterStone Bank is based in Wauwatosa and has nine community bank branches in the Milwaukee market. It has a loan production office in Minneapolis and mortgage banking offices in 17 states.

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Westbury Bancorp reports solid Q3
July 27, 2015 12:15 PM
West Bend-based Westbury Bancorp Inc. has reported third quarter net income of $110,000, or 3 cents per share, up from $69,000, or 1 cent per share, in the third quarter of 2014.

Total interest and dividend income was $5.3 million, up 17.4 percent from $4.5 million in the same period a year ago.

Net interest income was $4.8 million, up 16 percent from $4.1 million in the third quarter of 2014. Non-interest income was flat year-over-year.

The company had total assets of $629.4 million in the third quarter, up from $556.5 million in the saem period a year ago.

“For this quarter, compared to the first two quarters of the year, our earnings decreased due to decisions made by management that will ultimately contribute to progress toward our long-term goal of earnings growth,” said Ray Lipman, chairman and chief executive officer of Westbury. “We made the decision to close an underperforming branch office and to buyout a service contract. These decisions reduced earnings this quarter but are expected to reduce expenses in future periods for the company. Without the impact of these non-recurring expenses and the large OREO valuation adjustment discussed below, our net income for the quarter would have continued the growth trend from the previous four quarters."

"Our growth goals are being accomplished through executing our strategic plan to build upon strong commercial and personal banking relationships to increase commercial and residential loans and related deposits, reduce non-performing assets, control operating expenses and increase non-interest income to continue to improve our performance,” said Greg Remus, president. “We are also using capital management initiatives such as our current stock repurchase program to deploy excess capital and maximize the return on our shareholders' investment in the company. We are confident that our current strategy will continue to provide revenue and earnings growth and enhance long-term shareholder value."
Westbury Bancorp is the holding company for Westbury Bank, which has eight branches and one loan production office in Washington, Waukesha and Outagamie counties.

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Milwaukee firm advises on Hitachi deal
July 27, 2015 11:43 AM
Milwaukee-based investment advisory firm M&A Consultants Ltd. advised on a recent acquisition of an Illinois company by Hitachi America Ltd.

Hitachi acquired substantially all of the assets of Elk Grove, Ill.-based IMS-Partners Inc., and M&A Consultants assisted IMS-Partners in the negotiations and its valuation. Financial terms of the transaction were not disclosed.

IMS, founded in 1988, offers customized solutions for Midwestern manufacturers in the areas of gluing, taping, labeling, stenciling, and marking inks and glues. Its current leadership will continue at the helm of the new company.

The company formed by the transaction is Hitachi Industrial Equipment Marking Solutions Inc. Its headquarters will be in Elk Grove.

Hitachi supplied some of IMS’ products. It plans to expand the business nationally.

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Biz Blog: A unified approach to regional transportation, including transit
July 27, 2015 12:29 PM
Over the last several decades, the economic vitality and growth of Milwaukee and southeastern Wisconsin have fared poorly to other metropolitan regions in the country, with rankings in comparative studies generally placing our region in the lower third of performance.

Read more about the case for an efficient transportation entity in a Milwaukee Biz Blog by Tom Rave, the recently retired executive director of The Gateway to Milwaukee and of Aeroptropolis Milwaukee.

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Gitomer: Your missing power: Master mind
July 27, 2015 11:06 AM
Perhaps the most powerful principle Napoleon Hill wrote about, and certainly the most enduring, is the 9th step towards riches: Power of the Master Mind. The idea of a Master Mind group was created, put forth, and expounded upon by Napoleon Hill in his two classic books, Think and Grow Rich, written in 1937, and “How to Sell Your Way Through Life," written in 1938.

If you want to have a better, easier, more fun, more productive, less frustrating (sound good so far?), more bountiful, and more profitable life: Create a Master Mind. A Master Mind group can help you and your business succeed far better and far faster than you can on your own.

Read more in today’s Small Biz Strategies column by Jeffrey Gitomer.

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Morning Headlines: Anaerobic digester project underway at Majestic Meadows
July 27, 2015 10:51 AM
Digested Organics LLC has begun construction on its first fully Integrated Manure Management System at the Majestic Meadows Dairy in Sheboygan Falls.

Read more in today’s Wisconsin Morning Headlines.

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Johnson Controls to spin-off Automotive Experience division
July 24, 2015 09:53 AM
Glendale-based Johnson Controls Inc. announced today it plans to spin-off its Automotive Experience business to create a separate company.

The tax-free division would form a new publicly traded company, and is expected to be finished in about a year. The company confirmed it was considering its options for the division last month.

Bruce McDonald, vice chairman and executive vice president of Johnson Controls, will serve as chairman and chief executive officer of the new company, and Beda Bolzenius, president of the Automotive Experience division, will serve as president and chief operating officer of the new company.

The Automotive Experience division, which includes vehicle seating, interiors and electronics, reported $22 billion in revenue last year, and Johnson Controls has touted its well-established position in the marketplace and in growth locations like China. On July 2, Johnson Controls established a $4.5 billion joint venture between its automotive interiors business and Yanfeng Automotive Interiors to form the largest automotive interiors company in the world.

“This is a great opportunity for our Automotive Experience business to further its position as the global leader in automotive seating and interiors,” said Alex Molinaroli, chairman and chief executive officer of Johnson Controls. “At the same time, Johnson Controls will move forward with our multi-industrial strategies and make investments in our core growth platforms around buildings and energy storage.”

Johnson Controls is also in the process of completing the $1.5 billion sale of its Global WorkPlace Solutions business to the CBRE Group, which is expected to close in the fourth quarter. At the same time, the company has started a complete review of its costs. Last month, it hired Greg Guyett as executive vice president, Corporate Development, effective Aug. 10 to lead merger and acquisition activities, maintain existing and foster new relationships with external financial advisory firms, and assist with company growth initiatives.

Johnson Controls has 170,000 employees serving customers in more than 150 countries. It makes products, services and solutions to optimize the energy and operational efficiencies of buildings; lead-acid batteries and advanced batteries for hybrid and electric vehicles; and interior systems for automobiles.

“We are making significant changes to our multi-industry portfolio to drive future growth and increased shareholder value,” Molinaroli said. “We see considerable opportunities for growth in our buildings and energy storage businesses, and expect increasing bottom-line benefits from the Johnson Controls Operating System as we leverage our scale and expertise across the businesses. Even in this time of change, however, our top priority remains operational excellence and consistent execution with a strong focus on our customers. We expect to complete fiscal 2015 with record results, providing strong momentum as we enter fiscal 2016.”

The company also today reported its fiscal third quarter results.

Net income was $207 million, or 27 cents per share, up from $199 million, or 26 cents per share, in the third quarter of 2014.

Operating income was $747 million in the quarter, up from $401 million in the same period a year ago. Selling, general and administrative expenses increased from $943 million to $975 million in the quarter.

Revenue totaled $9.6 billion, down from $9.8 billion in the third quarter of 2014.

The company reported a loss from discontinued operations of $325 million during the third quarter, compared to $48 million in the comparable quarter. The Global WorkPlace Solutions business has been reclassified as discontinued operations for the quarter.

“Our Automotive and Power businesses delivered significant margin improvements, while Building Efficiency saw higher revenues, backlog and orders. The Building Efficiency backlog increase was the biggest quarterly year on year improvement since 2012,” Molinaroli said. “We continued to see growing demand across our global markets and are realizing the benefits from our Johnson Controls Operating System efforts.”

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BizTracker: Unemployment insurance claims fall to lowest level in 40 years
July 24, 2015 11:32 AM
Initial unemployment insurance claims fell to 255,000 nationally last week, on a seasonally adjusted basis.

Read more in the BizTimes BizTracker, which tracks local, regional and national economic data.

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