2017 was a year of change! With the changing political climate we saw activity in the M&A markets increase and create a market characterized by fierce competition and a surplus of capital, resulting in median EBITDA multiples in mid-market M&A hitting unprecedented levels. The forecast for 2018 is for this trend to continue and creates a great environment to sell a business.

With our completed restructuring in our sister companies, NuVescor and Rua Associates, we are poised for our strongest year yet serving our clients in 2018. With our uniquely better process, the Rua Transaction Process, we have seen successful outcomes for our sellers in 2017 with some amazing results. We look forward to this continuing trend in 2018 with a strong pipeline and talented staff.

This is a great time to be a seller, and we look forward to helping all of our clients achieve outstanding results in 2018!!!

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.

NuVescor Group, Michigan’s premier mergers and acquisitions firm, is pleased to announce the successful sale of Mission Design & Automation LLC of Holland, MI to Concurrence Capital Holdings LLC of Grand Rapids. NuVescor, represented Mission Design and Automation, working with the support of Rua Associates.

A leader in automation technology for a diverse mix of industries, Mission Design and Automation was founded in 2004 on the principle of treating all stakeholders – customers, employees, suppliers and partners – with the highest degree of integrity. Mission specializes in the design and manufacturing of highly complex automation solutions for the automotive, office furniture, medical and consumer goods industries, serving customers in North America.

Concurrence Capital Holdings is a private investment and management firm that offers the strategic capital, expertise and partners to provide the right transitional solution for targeted investment opportunities.

“Loren and the entire Mission team are to be commended for what they have accomplished together. They have developed a stellar reputation as a company that people want to work with and for, and that is known for world-class design and automation capabilities and exceptional customer service,” said Michael Brom, Managing Partner at Concurrence Capital Holdings. “They are well positioned for even greater growth as the automation industry continues to flourish. Jason Byrd and I are thrilled to partner with them and leverage our experience to help support their continued growth.”

NuVescor is a distinguished mergers & acquisitions service provider headquartered in West Michigan and serving clients throughout Michigan and the Midwest. Their passion is discerning and achieving client objectives through successful and timely business transactions. NuVescor offers a complete array of professional buy and sell-side business brokerage services including corporate M&A outsourcing to a growing network of clientele.

This article was originally published on MiBiz on November 27, 2016.

GRAND RAPIDS — Randy Rua left NuVescor Group LLC seven years ago to break out on his own and launch an M&A firm that focused on working with small business owners.

Now he’s back at the Grand Rapids-based NuVescor as an owner.  In August, Rua and his wife, Tami, bought NuVescor, which focuses on M&A in the lower middle market.

The Ruas own NuVescor together. They have maintained NuVescor’s downtown Grand Rapids office and operate the firm as a separate business from Rua Associates LLC in Zeeland, which Randy Rua formed in 2010.

“It’s a personal investment,” Randy Rua said.

Buying NuVescor enables him to expand into a new market and leverage the strengths of both firms by referring prospects to each other when needed.

“It allows us to have access to a wider range of clients,” he said.

Rua Associates focuses on transactions with a value of $5 million or less and works to educate small business owners and their advisers about what it takes to buy or sell a company. By comparison, NuVescor works with clients involved in larger lower middle-market deals.

Operating the two firms as separate businesses stems from the brand recognition that each has built and their differing structures. It also allows each to focus on its specialty while sharing some back-office administrative functions.

Rua Associates at times lost out on prospective clients whose CPAs or other advisers perceived the firm as too small to handle their transactions. Rua Associates now refers those larger client prospects to NuVescor.

“It’s going to be pretty hard to break that brand perception. If we merge them together, we lose that. And that’s the same thing for NuVescor. They’re not set up to handle the smaller transactions,” Rua said. “If we merge them, it just wouldn’t work. They’re just so different.

“It’s different enough that it made sense to keep different teams.”

Rua Associates, for example, has a staff person who specializes in small business banking to help clients through the process of financing a deal. NuVescor, on the other hand, serves a base of clients in Michigan and neighboring states who typically have that expertise in-house, Rua said.

Since closing the deal a few months ago, both firms have landed clients that otherwise may have gone elsewhere, “so we’re already seeing the fruits of it working,” he said.

Rua worked at NuVescor for two years prior to forming Rua Associates to focus on what he saw as an underserved market. He maintained contact with NuVescor owner Kevin Hirdes. The two often got together to discuss business and Rua said he considers Hirdes a mentor.

As Hirdes began to talk about stepping back from running his firm, they started discussing a possible deal.

“It was time for me to turn the reins over to someone with a passion for doing mergers and acquisition work,” said Hirdes, who formed NuVescor in 2007.

“I wanted to back away from the day-to-day operations of running a mergers and acquisitions business,” he said. “My passion is really building and growing larger organizations in the lower middle market space.”

Hirdes remains with the firm as a managing director, although he expects to reduce his role over time.

Selling but staying involved with the firm gives Hirdes “the opportunity to do some other things now.” He hopes to provide leadership for other companies, whether at a board level or in an advisory role when he can offer operations guidance and invest in businesses.

Rua pursued the deal with NuVescor because he had come to miss working on larger transactions. With strong M&A activity of the last few years continuing in the lower middle market, he saw an opportunity to expand his business holdings beyond working with small businesses.

“I said, ‘I want to go after the bigger market because there’s a lot of opportunity there.’ The lower middle market has become very active in the last two years and right now is very active,” he said. “It wasn’t that way when I formed Rua Associates and I was benefitting from the fact that the small business market was very active, but the lower middle market was very bad at that time.

“Now we’re at a point where that’s really strong and I wanted to participate in that. NuVescor gave me an opportunity to do that.”