GRAND RAPIDS, MI –  NuVescor Group is pleased to announce the successful sale of Cheeze Kurls, Inc., based in Grand Rapids, MI, to Kilroy Partners, of Boca Raton, FL.

Kilroy Partners is a private investment firm focused on investing in entrepreneurial, family-owned and non-institutionally controlled businesses in the lower middle market.

Former Cheeze Kurls co-owners, President Timothy Dedinas and Vice President Robert Franzak, will each retain a minority ownership and will remain in advisory roles with the Company.

Franzak said Kilroy Partners is the right buyer for Cheeze Kurls, the company’s future and its employees. Other potential buyers in the past have proposed closing the plant and moving operations out of state. Not so with Kilroy, Franzak said.

“When we met with them, they provided a vision for us with what they wanted to do with the Company and how they wanted to expand,” Franzak said. “The key thing for us was Kilroy keeping the employees we had on hand at the time.

“That was number one with us – keeping the business in Grand Rapids and keeping the employees. The employees will reap the rewards of the growth that Kilroy will set forth here. Because of their mission, we decided to go with them and we feel confident with what they are going to do.”

Dedinas’ and Franzak’s fathers founded Cheeze Kurls in 1964. The sons grew up with the company and purchased it in 1999. Since then, they’ve taken it through multiple expansions. Franzak said another expansion is needed now – one of the factors that helped prompt the Company’s sale.

NuVescor Group represented Cheeze Kurls in this transaction and details of the transaction were not disclosed. “It is always exciting to work with businesses in West Michigan, and to be able to assist a company that has such a long history in Michigan was an honor,” said Randy Rua, Managing Partner at NuVescor. “We were able to find a buyer that will continue the growth trend in West Michigan which was very important to Tim and Bob.”

About Kilroy Partners
Kilroy Partners is an operationally-focused private investment firm, based in Boca Raton, FL, providing equity capital to entrepreneurial, family-owned and non-institutionally controlled companies in the lower-middle market. They invest in industries where they have experience and leverage a network of operating resources to partner with management in order to drive operational improvement and create long term value. Kilroy invests across a variety of industries including food, broad based manufacturing, industrial services and transportation & logistics. For more information, please visit: www.kilroypartners.com.

About Cheeze Kurls, Inc.
Cheeze Kurls, Inc., based in Grand Rapids, Michigan, is a private label snack food manufacturer that sells its products to retail, grocery, drugstore, wholesale and discount retailers nationwide, and provides contract manufacturing to other snack food companies. The Company produces a variety of snack types including extruded, fried and baked products as well as popcorn and party mixes. The Company has been in operation more than 50 years.

About NuVescor Group
NuVescor Group, based in West Michigan, is a distinguished mergers & acquisitions service provider that partners with other professional service providers to provide the full array of disciplines needed to have successful and timely business transactions. NuVescor works within many different industries and has a strong focus and track record specifically in the Manufacturing sector. NuVescor utilizes a proprietary proven process that greatly increases the success rates for business transactions as well as the customer experience. For additional information, please visit www.nuvescor.com.

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Manufacturing businesses have seen the industry contract to its lowest level in more than 10 years. The Institute for Supply Management’s manufacturing index fell to 47.2 in December 2019—almost as low as it was at the end of the Great Recession. A tight labor market, retaliatory Chinese tariffs, and automation all figure prominently in this downturn. Here are five trends we are seeing in manufacturing M&A in 2020. 

The Rise of the Robots 
A tight labor market is holding back manufacturing companies, but has spurred deal-making in robotics. Robots can help streamline processes, take over dangers roles, and save money. PE firms see the labor shortage as an incentive to purchase companies that can aid production. For example, Ames Drywall Finishing Tools presented Sub Capital with a powerful opportunity to purchase its automatic drywall finishing tools. Industry analysts suggest the tools can reduce costs by 60 percent. 

Corporate Divestment
Larger entities hope to shed assets that are not integral to the business core. PE is grabbing these castoffs. KPS acquired Howden in 2019 for $1.8 billion. This sale allowed the prior holder to pay down debt, as KPS grew the business into a revenue generator. 

A 2018 Ernst & Young Study emphasizes that almost nine in ten companies plan to divest of assets in the next two years—more than double the figure from just a year earlier. Global tax shifts, new tech, and emerging trends highlight the need to sell non-core assets. Seventy-four percent of executives say that the evolving technological world directly influences divestment plans. 

Tunnels and Bridges
Infrastructure investments are inevitable and highly necessary. Many PE firms are raising capital so that they can capitalize on a boom in infrastructure. The United States needs significant infrastructure investments, despite ongoing political squabbles. By building capacity now, companies can better position themselves to take advantage of the inevitable boom. The latest $1.4 trillion federal spending bill will set aside money for infrastructure repair. Those funds will likely grow with time, and investors want to ensure they are ready. 

Is Bigger Better?
In the manufacturing sector, the answer is a resounding yes. Retaining customers and growing the base is difficult. Manufacturers find that they can do so by moving into related businesses, becoming larger and more competitive. Size is the driving force behind manufacturing M&A. Companies want to be bigger. 

The biggest challenge most manufacturing companies face is attracting customers, and then retaining them. M&A blends and expands groups of customers, making better use of investments and expenses. One Equity demonstrated that in 2017, when it invested in Anvil International. Five acquisitions later, after just two years, it sold Anvil to Smith-Cooper International, which capitalized on Anvil’s big footprint to offer more services. One Equity almost doubled the organization’s EBITDA. 

Real-Time Data

Real-time data is increasingly popular across industries. It opens new opportunities, and offers significant value to customers. Manufacturers can anticipate when a part needs to be replaced, and plan accordingly, producing less downtime and frustration. Past production data is misleading, creating gaps in coverage and service, as well as quality control issues. With better data, manufacturing firms can offer faster service, improving the customer experience. 

About NuVescor Mergers & Acquisitions
At NuVescor, we align the interests of investors and business owners to enable the personal and financial goals of our clients. For over a decade, we have helped founders and owners of companies in the manufacturing sectors achieve maximum value for their companies. Together, we can provide business valuations, financial analysis, investment guidance, and business transaction advice for middle-market companies with revenues from $5 million to $500 million.

The ongoing COVID crisis has spurred worldwide uncertainty, with M&A becoming more challenging than ever. The manufacturing sector has seen changes in every aspect of transactions. Here’s what you can expect if you’re planning a transaction. 

Beginning the Process 
Travel restrictions present many challenges. Many buyers are unable to travel at all. Sellers focused on the safety of their workforce may also be unable to travel. Instead, sellers may film facility walk-throughs while relying heavily on videoconferencing. 

Travel restrictions can also make due diligence more difficult. Sellers must be flexible and accommodating, and the parties may need to adjust their timeline to accommodate pandemic-related challenges. 

Due Diligence Shifts
Due diligence can be extremely difficult with travel restrictions. One particularly important area is inventory buildup. Some buyers report this is happening as sellers seek to keep their operations running while purchases decline. Buyers should be mindful about this problem, and especially cautious that they do not purchase inventory that might soon be obsolete. Concentrated supplier issues can also be a concern. Sellers should identify any areas of specific impact, then address them well before due diligence. 

The financial diligence team also faces new challenges. Buy-side teams must ensure that recent stimulus legislation does not distort financial statements. For instance, whether a seller has utilized a CARES Act PPP loan may significantly affect post-closing operations. Deals which close prior to loan forgiveness may require a holdback or specific indemnity to ensure that the seller, not the buyer, bears the risk of the loan. There’s a similar issue with CARES Act payroll tax deferrals. 

Buyers’ legal advisors must also review the seller’s response to the pandemic. Was it flexible? Did they develop new strategies for continuing to operate? Did they prioritize the safety and well-being of their staff, or did they doggedly persist with the old way of doing things in an inflexible manner? 

Valuation and Financing Issues
The biggest challenge with most transactions is going to be the way the pandemic affects valuation. Buyers will be reluctant to give full credit for pre-pandemic performance, but sellers will be equally reluctant to reduce the purchase price for something they anticipate will be a short-term crisis. In many transactions, a good idea is to defer some part of the purchase price, and to condition the post-closing payment on specific financial results. Buyers usually hope to base this earn-out on a net profit or EBITDA metric, while sellers prefer gross revenues or a similar bright line metric. Take great care when negotiating these provisions, as well as any covenants regarding post-closing operations. 

Similarly, most lenders will no longer be willing to finance pre-pandemic equity: capital ratios. This has increased demand for seller financing. This presents a number of challenges, but it also means that sellers who can finance a portion of the deal may be positioned to ask for more favorable deal terms. In some cases, seller financing may even mean the difference between whether or not a deal successfully closes. 

About NuVescor Mergers & Acquisitions
At NuVescor, we align the interests of investors and business owners to enable the personal and financial goals of our clients. For over a decade, we have helped founders and owners of companies in the manufacturing sectors achieve maximum value for their companies. Together, we can provide business valuations, financial analysis, investment guidance, and business transaction advice for middle-market companies with revenues from $5 million to $500 million.

GRAND RAPIDS, MI – March 6, 2020– NuVescor Group is pleased to announce the successful sale of Graphic Sciences, Inc. to Intellinetics, Inc., (OTCQB: INLX).

Intellinetics, Inc., (OTCQB: INLX) is a cloud-based document solutions provider that specializes in document scanning and digital conversion services, located in Columbus, OH. Intellinetics acquired Graphic Sciences, located in Madison Heights, MI, as a wholly owned subsidiary. At present, each company will continue to operate under its own name, maintain current offices, and experience minimal changes in personnel.

A key reason for the acquisition of Graphics Sciences is management’s belief that there is a strong synergy between the two companies, since each provides document management products and services to highly-regulated, risk- and compliance-intensive markets. Intellinetic’s IntelliCloud™ solution suite will be expanded to include Graphic Sciences’ document scanning and microfilm services while Graphic Sciences customers will benefit from the option to gain anywhere, anytime access to their digitized documents via the IntelliCloud Document Management Platform. NuVescor Group, a West Michigan based mergers and acquisitions firm represented Graphic Sciences and introduced the investment opportunity to Intellinetics.

“Adding Graphic Sciences service offerings, industry knowledge, and relationships creates a natural synergy between our two companies”, said James F. DeSocio, President & CEO of Intellinetics. “Adding their document scanning services to our IntelliCloud solution suite will allow us to offer our clients the professional management of capturing their documents, storage of their documents, and secure access of their documents throughout their entire life cycle in whatever form or medium is most appropriate. Plus, Graphic Sciences provides some very specialized services such as book and newspaper scanning, microfiche to microfilm conversions, and long-term paper and microfilm storage and retrieval. This creates many new cross-selling opportunities for us.”

Gregory Colton, outgoing President of Graphic Sciences, Inc., added, “We believe that a larger organization will allow us to provide a wider array of services to our customers. Currently we scan and deliver our customers’ documents onto digital media, such as a DVD, thumb drive or a file on a server. With Intellinetics we will be able to deliver the anywhere, anytime access to those files that our customers have been requesting. We are enthusiastic about what Graphic Sciences and Intellinetics together can do for our customers.” Mr. Colton plans to retire after a transition period to ensure a smooth management integration of Graphic Sciences.

“The exceptional customer trust in Graphic Sciences, and the goodwill created over years, is a testament to the Graphic Sciences unwavering commitment to putting quality and data security first. This culture has its roots in the leadership of Gregory Colton and Tom Liebold, Vice President and General Manager of Graphic Sciences, and we appreciate and expect to benefit from the business and team they have built over the last forty years,” concluded Mr. DeSocio.

Intellinetics was advised on the transaction by Taglich Brothers, Inc., located in Huntington, NY.

About Intellinetics, Inc.
Intellinetics, Inc., located in Columbus, Ohio, is a cloud-based content services software provider. Its IntelliCloud™ suite of solutions serve a mission-critical role for organizations in highly regulated, risk and compliance-intensive markets in Healthcare, K-12, Public Safety, Public Sector, Risk Management, Financial Services and beyond. IntelliCloud solutions make content secure, compliant, and process-ready to drive innovation, efficiencies and growth. For additional information, please visit www.intellinetics.com.

About Graphic Sciences, Inc.
Located in Madison Heights, Michigan, Graphic Sciences, Inc. has been helping organizations become paperless for over 33 years. Through its Image Technology Group and production scanning department, hundreds of millions of images have been converted from paper to digital, paper to microfilm, and microfiche to microfilm for business and federal, county, and municipal governments. Graphic Sciences also provides its clients with long-term paper and microfilm storage and retrieval options.

About NuVescor Group

NuVescor Group, based in West Michigan, is a distinguished mergers & acquisitions service provider that partners with other professional service providers to provide the full array of disciplines needed to have successful and timely business transactions. NuVescor utilizes a proprietary proven process that greatly increases the success rates for business transactions as well as the customer experience.

Cautionary Statement Regarding Intellinetics, Inc.
Statements in this press release which are not purely historical, including statements regarding the synergies, cross-selling opportunities and other benefits of the Graphics Sciences acquisition; future business; and new revenues associated with any product, industry, market, initiative, service or innovation; market penetration; execution of Intellinetics’ business plan, strategy, direction and focus; and other intentions, beliefs, expectations, representations, projections, plans or strategies regarding future growth and other future events are forward-looking statements. The forward-looking statements involve risks and uncertainties including, but not limited to, the risks associated with acquisitions generally and the ability of the Company to achieve the intended benefits of the Graphics Sciences business specifically, the future business, operations and financial results of Graphic Sciences, the effect of changing economic conditions, trends in the products markets, variations in Intellinetics’ cash flow or adequacy of capital resources, market acceptance risks, the success of Intellinetics’ channel partners, technical development risks, and other risks, uncertainties and other factors discussed from time to time in its reports filed with or furnished to the Securities and Exchange Commission, including in Intellinetics’ most recent annual report on Form 10-K as well as subsequently filed reports on Form 10-Q and Form 8-K. Intellinetics cautions investors not to place undue reliance on the forward-looking statements contained in this press release. Intellinetics disclaims any obligation and does not undertake to update or revise any forward-looking statements in this press release. Expanded and historical information is made available to the public by Intellinetics on its website at www.intellinetics.com or at www.sec.gov.

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