Southeastern Wisconsin financial service industry news
Tuesday, March 24, 2015
M&A Forum will assess dynamics of seller's market
“It's A Seller's Market: How Long Will It Last?” will be the theme of the 2015 BizTimes M&A Forum.
Business owners interested in selling their companies, as well as executives interested in acquiring businesses are invited to attend. The conference will take place on Friday, May 1, from 7:30 to 11 a.m. at the Hilton Milwaukee City Center.
The keynote presenter at the event will be Andy Greenberg, chief executive officer of GF Data and a managing director of Fairmount Partners, a private investment bank in the Philadelphia area. Prior to joining Fairmount, Greenberg was a managing director in charge of M&A groups at Brown Brothers Harriman and Commerce Capital Markets. Before his move to investment banking, he was Pennsylvania’s Secretary of Commerce.
Greenberg will discuss the macro-level factors affecting values and trends in the market. He also will share confidential data on private equity-backed transactions in the $10 million to $250 million value range.
Greenberg’s presentation will be followed by a panel discussion featuring buyers, sellers and professional experts who will share their experiences and expertise on the state of the mergers and acquisitions market in the region and beyond. The panelists will include:
The panel discussion will be followed by breakout sessions covering a variety of M&A issues, including danger zones and pitfalls in a deal, the deal process from a monetary standpoint maximizing value in a business.
- David Nestingen, president and CEO, IEWC Global Solutions.
- Steven Peterson, managing director, Brass Ring Capital Inc.
- Alex Kowalski, owner and CEO, Performance Welding.
- Kent Velde, president, Lakeview Equity Partners LLC.
- Ann Hanna, MBA, CPA , managing director, Schenck M&A Solutions.
- Eric Lenzen, shareholder and co-chair, Corporate Finance Practice Group, Whyte Hirschboeck Dudek S.C.
To register to attend, visit www.biztimes.com/maforum.
Baird acquires Clearwater Group
The UK private equity group of Baird Capital, the direct investment arm of Milwaukee-based Robert W. Baird & Co. Inc., has acquired a majority interest in Clearwater Group.
Camberley, Surrey-based Clearwater, founded in 1990 by CEO Guy Rowley, offers water solutions and services to estate owners and facilities managers in the food and beverage, pharmaceutical, industrial and public sectors. It has 10 offices, and its water treatment, hygiene, engineering and pump services are offered across the UK and Ireland.
As part of the transaction, Baird Capital managing director James Benfield will join the Clearwater board of directors.
“We are delighted to partner with the Clearwater team, and to provide capital and other resources to help support the business as it continues its impressive record of growth,” Benfield said. “The business is a leader in the expanding water treatment solutions market with an enviable technical reputation. Our strong sector knowledge and resources will help the company build on its position as a trusted provider of water services.”
“We are excited to work alongside Baird Capital in the water services space,” Rowley said. “Their global resources and sector expertise will be valuable as we focus on driving future growth.”
Money Smart Week to promote personal financial awareness
The Governor's Council on Financial Literacy and the Federal Reserve Bank of Chicago will host Money Smart Week Wisconsin from April 18 to 25.
Money Smart Week, which includes hundreds of events statewide, aims to help people improve their personal financial awareness. It is part of the national financial literacy awareness month, a cooperative effort among state and federal government agencies and private organizations to raise awareness of the importance and value of financial literacy.
Many of the events will focus on teaching financial literacy to elementary school students. Among the planned activities are: “The Big Read,” a giveaway and dozens of readings of the book “Alexander, Who Used to be Rich last Sunday;” Wisconsin Teach Children to Save Day on April 14; National Credit Union Youth Month; National Credit Education Month; and April is Financial Literacy Month.
“I commend Wisconsin’s business community for its support of financial literacy awareness efforts,” said Ray Allen, secretary of the Wisconsin Department of Financial Institutions. “The seminars and workshops scheduled throughout April will help our citizens, young and old alike, to improve their financial capabilities. These efforts are good for consumers and good for the Wisconsin economy.”
Baird Capital sells Digi-Star
Milwaukee-based Baird Capital's U.S. Private Equity group has sold portfolio company Digi-Star to Topcon Positioning Group.
Fort Atkinson-based Digi-Star is a leading international agricultural measurement solutions provider. It distributes electronic equipment, precision sensors, optical yield and feed management sensors, displays, position verification and software that farmers and other equipment operators use in gathering and analyzing process data.
“Topcon and Digi-Star have numerous synergies with electronics, sensors, and integration of specific user interfaces for the agriculture and industrial markets that will complement each other’s customers,” said Mac Moore, president and chief executive officer of Digi-Star. “Both companies will benefit from the expanded product lines and solutions that progressive customers depend upon for maximum profitability.”
Livermore, Calif.-based Topcon makes precise positioning products and solutions for the agriculture industry. The terms of the transaction were not disclosed. It designs, manufactures and distributes products used in global surveying, construction, agriculture, civil engineering, BIM, mapping and GIS, asset management and mobile control. It has more than 2,000 employees worldwide.
“After several years of working on development projects together, we are delighted with this acquisition,” said Ray O’Connor, president and CEO of Topcon Positioning Group. “Digi-Star and Topcon Precision Agriculture are a perfect fit, bringing complementary technologies and distribution channels to our rapidly growing precision agricultural division. At a time when many companies are decreasing their investment in agricultural markets, we are increasingly optimistic about their growth based upon our strong commitment to developing management systems and solutions that bring the power of the Internet of Things to every farm.”
Digi-Star has more than 220 employees at its three global locations. It will continue to be based in Fort Atkinson, and its employees and facilities will be folded into Topcon.
“When we initially invested in Digi-Star in 2011, our goal was to take an already strong platform business in the agricultural products and process controls industry and continue to develop its capabilities,” said Andrew Brickman, partner with Baird Capital’s Private Equity group. “Over the last few years, we have worked with Digi-Star’s leadership to expand the company’s global footprint and service offerings through targeted acquisitions and operational improvements.”
Catholic Financial Life reports record 2014 results
Milwaukee-based life insurance organization Catholic Financial Life has reported record 2014 results.
The private nonprofit said its net income was $10.8 million in 2014, up from $7.2 million in 2013. Assets grew to $1.4 billion, while life insurance in force surpassed $5 billion.
Catholic Financial Life’s surplus was up 7 percent, to $45.9 million. Total adjusted capital was up 8.5 percent, to $54.6 million.
The company expects to pay members 2014 dividends that are 6 percent higher, on average, than in 2013.
“Last year at this time I said that I was bullish and our 2014 results affirm that optimism,” said Bill O’Toole, president and chief executive officer. “I remain optimistic about 2015 given our fiscally conservative approach combined with focused investments in our people and technology.
“When the organization does well financially our members share in that success. That’s how we have done business for 147 years.”
Catholic Financial Life has 112,000 members nationwide. It is the second largest Catholic fraternal life insurance organization in the country.
IEWC acquires UK company
New Berlin-based IEWC has acquired UK-based Argosy Components Ltd.
Argosy, which has 25 employees, is a leading products and components distributor for the broadcast and communications industry. It has locations in England, Dubai and Kuala Lumpur, and its clients include BBC, NBC, MTV and Al Jazeera.
IEWC, which has more than 400 employees, is a premier global supplier of wire, cable and wire management products for sub-assemblers, OEMs and broadcast and communications firms, with distribution centers strategically located throughout the world. The acquisition of Argosy has expanded its reach in the UK, United Arab Emirates and Malaysia, while adding to its broadcast and communications offerings.
Mike Purnell and Ken Eckardt, the previous owners of Argosy, have retired from the business and have been retained as external consultants. IEWC is adding some employees to the Argosy team, which will retain its existing managers.
The companies declined to disclose the transaction price.
“As IEWC continues to strengthen its investments within the broadcast and communications industries, choosing partners and solutions that will truly enhance the IEWC customer experience has been of the utmost importance,” said Roger Caynor, vice president of Broadcast & Communications at IEWC. “With Argosy, their proven track record with supplier partners and customers will allow IEWC to continue to raise the bar on our offered solutions.”
CDM Tool sold to Jacsten Holdings
Hartford's CDM Tool & Mfg. Co. Inc. has been acquired by Milwaukee private investment firm Jacsten Holdings LLC. The family company was sold by Pam Priestaf, whose father founded CDM.
Jacsten has a long-term buy-and-hold investment strategy, and on average holds its portfolio companies for around 10 years.
Founded in 1962, CDM makes plastic injection molds and precision molds for the plastic industry. It has about 35 employees, all of whom will remain with the company, said Stephen Hansen, an investment professional at Jacsten. Scott Kolkema will continue to lead the company, in partnership with Jacsten. The business is located at 749 N. Wacker Drive in Hartford.
“In Jacsten we found a partner that met all of our requirements,” Priestaf said. “We were drawn to the fact that Jacsten is itself a family-run company that is committed to CDM Tool for the long-term.”
Priestaf’s requirements included: Keeping the business in Hartford and continuing to be involved in the community; valuing and securing the future of employees; and valuing loyal customers.
Jacsten saw opportunity in CDM because of a shortage of mold manufacturing companies in the industry, Hansen said.
“CDM Tool possesses unique technical expertise and capabilities in designing and manufacturing medium-to-large complex tooling for highly engineered parts,” said Mike Hansen, founder of Jacsten. “The company’s consistent track record speaks for itself, as does its list of loyal customers that have been partners with CDM Tool for, on average, 15+ years and in some cases over 35 years.”
Marcus Corp. revenue up 9%
Milwaukee-based The Marcus Corp. reported third quarter net income of $2.8 million, or 11 cents per share, compared with net income of $273,000, or 15 cents per share, in the third quarter of 2014.
Net earnings attributable to The Marcus Corp. were down 24 percent in the third quarter of 2015. The decrease resulted from a $3.8 million pre-tax loss attributable to non-controlling interests, related to a settlement with the company’s partners in the Skirvin Hilton hotel, that was recorded in the third quarter of 2014.
Operating income in the third quarter of 2015 was $7.3 million, up from $5.7 million in the same period a year ago.
Marcus reported total revenues of $120.2 million in the third quarter, up 9.4 percent from $110 million in the third quarter of 2014.
“We are pleased to report record revenues and another strong third quarter, driven by record results for Marcus Theatres,” said Gregory Marcus, president and chief executive officer of the company. “The division significantly outperformed the industry for the fifth consecutive quarter. Marcus Hotels & Resorts also reported record third quarter revenues, although operating income was reduced by the temporary impact of construction for the conversion of our downtown Chicago hotel into one of the first AC Hotels by Marriott in the U.S.”
Actuant earnings fall on strong dollar, weak end markets
Menomonee Falls-based Actuant Corp. reported a second quarter net loss of $64.8 million, or $1.05 lost per share, in the second quarter, compared with net income of $41.4 million, or 56 cents per share, in the second quarter of 2014.
The global industrial firm’s quarterly operating loss was $56.4 million, compared with operating profit of $39 million in the same period a year ago.
Revenue was $301 million in the quarter, down from $327.8 million in the second quarter of 2014.
Actuant took an $84.4 million impairment charge during the quarter related to adverse conditions in upstream oil & gas markets. It also saw a $10.1 million loss in cash during the quarter as a result of the effect of exchange rate changes.
“In addition to normal seasonality, the second quarter proved challenging given the further strengthening of the U.S. dollar, low oil & gas prices and weak conditions across a number of end markets,” said Mark Goldstein, president and chief executive officer. “The Energy segment’s results were in line with expectations, including 2 percent core sales growth which reflected robust Viking performance, partially offset by accelerating weakness in other upstream markets, most notably in the North Sea. We were pleased with Industrial’s 2 percent core growth, yet demand remains inconsistent. Within Engineered Solutions, moderating agriculture demand, weak auto volumes and last year’s truck pre-buy drove an 8 percent core sales decline. Given these mixed end market dynamics and currency headwinds, we are executing a number of actions to better align and resize our organization.”
Actuant also announced a 7 million share repurchase program.
The company has repurchased 11 million shares, or about 15 percent of its stock, over the past year. Actuant currently has 9.5 million in shares authorized for repurchase, which it plans to do gradually over the next few years.
“Our capital allocation priorities remain consistent,” Goldstein said. “Our top priority is to execute attractive tuck-in acquisitions to strengthen our existing platforms. However, we will continue to use opportunistic buy-backs to return excess cash to shareholders.”
Federal Heath Sign Company acquires DuraColor
Oceanside, Calif.-based Federal Heath Sign Company LLC recently acquired Racine-based DuraColor LLC.
DuraColor is a custom graphics manufacturer. The company is a large format digital and screen printer with expertise in producing graphics for display companies, original equipment manufacturers (OEM), retailers and petroleum companies.
Federal Health is a signage and visual communications company.
In a news release, Federal Health said, “DuraColor’s manufacturing/digital printing capabilities coupled with its state-of-the-art finishing equipment will add an extra dimension to Federal Heath’s turnkey capabilities in meeting the needs of customers in worldwide market segments.”
“Traditional production methods in both the printing and signage industries are being replaced with digitally printed high resolution graphics”, said Federal Heath President & CEO Kevin Stotmeister.
DuraColor’s President Peter Carey added “To our knowledge, no other company brings together the range of image-related products and services for major retailers as Federal Heath and DuraColor will. DuraColor looks forward to becoming part of the Federal Heath family of leading brands, with an even greater emphasis on servicing our customers and cross-selling our joint capabilities.”
Brown Deer-based Bank Mutual has added Vanessa Reyes to its residential lending team as a community based loan officer. Reyes will serve the Racine and Milwaukee communities, providing customized mortgage lending solutions and facilitating CRA loan programs. She has more than two years of experience in the banking industry, and previously worked as business development officer at Tri City National Bank. Reyes holds a bachelor of science degree from the University of Wisconsin-Milwaukee.
Milwaukee-based investment banking firm Promontory Point Capital has added Thomas Gregg Jr. as an associate. Gregg will support the firm’s partners in various activities, including financial analysis, industry research and due diligence, while building and expanding PPC’s relationships with lenders, private equity firms and other sources of institutional capital. He graduated summa cum laude with a bachelor of science in business administration from Marquette University, and participated in several international study programs. Gregg previously worked at U.S. Bancorp in Milwaukee.
This exclusive news bulletin is compiled by BizTimes Milwaukee reporter Molly Dill. This bulletin is published every Tuesday morning. Send financial services industry news and tips to email@example.com or call her at (414) 336-7144.
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