There is a saying that goes, “If you take care of the little things, the big things take care of themselves.” I am not proposing that we ignore the big picture items, the key milestones or the end state we are striving for. I am saying that by paying attention to the little details that can trip up a transaction, it makes meeting the milestones a much easier process.

What are some of the little details in a transaction? There are a number of them that can go from a little detail to a large delay, and with some planning and preparation, they become easy boxes to check. Some of these are specific to Michigan based businesses.

• Form UIA 1027, Business Transferor’s Notice to Transferee of Unemployment Tax Liability and Rate. This is used by the seller to disclose any issues that could affect current or future tax rates, and must be disclosed for the most recent 5 years. It is a misdemeanor not to disclose to the buyer.
• Form 5156, Request for Tax Clearance. Used by the seller to have the Michigan Department of Treasury provide known or estimated tax liability for the purpose of establishing a tax escrow, if any. The request must come from the seller and after the transaction is complete a new request is submitted to obtain a certificate for the release of an escrowed funds.
• Articles of Incorporation with Amendments, Bylaws, Certificate of Good Standing. These will be requested during the due diligence phase and copies should be confirmed, up to date, and made available.
• Start early to understand the scope of insurance needed, and have an insurance agent ready to review and requote if needed. This process does not take long but should not be overlooked or delayed until the last minute.
• Environmental Due Diligence. If there will be Real Estate involved in a transaction a Phase 1 will typically be a requirement of the funding source. If a Phase 1 has been done in the past, having an electronic copy available will save time and energy when it is requested. If the Phase I is out of date, the information provided in the Phase 1 will expedite an updated test or refresh as needed.

This is by no means an exhaustive list of the items needed to be done during a transaction. It is a short list of small details that are important and easy ones to stay ahead of. Having a process in place and an experienced team to facilitate that process results in successful transactions.

This article was originally published by MiBiz October 1, 2017.

GRAND RAPIDS — A West Michigan-based private equity firm closed on its first deal with an investment in Holland-based Mission Design & Automation LLC.

The deal with the 13-year-old producer of automation systems for the automotive, office furniture, medical and consumer goods industries came about five months after Concurrence Capital Holdings LLC formed.

“We couldn’t have picked a better first opportunity. Everything kind of matched up really well,” Jason Byrd, a co-founder and managing partner at Concurrence Capital, told MiBiz in an exclusive interview. “This is going to be a really nice deal because of who we’re partnering with.”

Concurrence Capital targets long-term investments in middle-market, family-owned businesses involved in manufacturing and business-to-business services with sales of more than $5 million, plus $1 million to $8 million in EBITDA.

In Mission Design & Automation, the private equity firm invested in a business that’s been averaging annualized growth of 50 percent over the last few years. The company was actively seeking growth capital and willing to take on an investor, and its management team wanted to remain intact to run the business and grow.

M&A firm NuVescor Group LLC of Grand Rapids represented Mission Design & Automation and introduced the investment opportunity to Concurrence Capital, Byrd said. Terms of the deal, which closed this past spring and was just now announced, were undisclosed.

Byrd and co-founder Michael Brom sifted through about four dozen prospective deals since April and were “very serious” about three, Byrd said. He describes the first deal as a “true partnership consistent with our investment parameters.”

Started in a pole barn by Loren Brouwer in 2004, Mission Design & Automation employs more than 25 people. The company operates out of a 21,000-square-foot facility southeast of Holland.

Brouwer said in a statement that he’s known Brom for more than 20 years. Mission Design & Automation began working on a deal with Concurrence Capital soon after the firm launched in April.

“When I learned that he and a partner had started Concurrence Capital Holdings, I thought they would be an ideal partner to support Mission in our next stage of growth,” Brouwer said.

Brouwer and co-owner Jon Maust will remain with the company, which is “well-positioned for even greater growth as the automation industry continues to flourish,” Brom said.

Of the deals Concurrence Capital has looked at since forming, two-thirds came forward through Byrd and Brom’s professional networks.

Byrd described the present deal flow as “solid.”

Deals typically take six months to complete from introduction, and Byrd said the firm could close another by the time it hits is first anniversary next spring.

“But we are focused on finding the right deals,” he said. “We feel very good about where we find ourselves.”

Prior to forming Concurrence Capital, Byrd worked at Grand Rapids-based M&A and investment banking firm Charter Capital Partners. Brom was CFO at Huizenga Group, a family office for the family of J.C. Huizenga.