Smart Business Dealmakers

Foundation Investment Partners Buys Spartan Tool Supply

Tue, 12 Mar 2024 12:00:00 Z

Chagrin Falls-based Foundation Investment Partners has acquired Spartan Tool Supply, a distributor of industrial power tools and equipment based in Columbus. Terms of the deal were not disclosed.

Spartan Tool Supply provides commercial tools and equipment to businesses across various industries.

"We are thrilled to welcome Spartan Tool Supply into the Foundation Investment Partners family," said Foundation Investment Partners Managing Member David Wood. "Spartan's reputation for providing leading industrial brands and stocking unique, hard-to-find consumables and accessories align perfectly with our dedication to delivering exceptional value to our customers."

Foundation plans to leverage its experience in the industrial distribution space to create value immediately.

Spartan Tool Supply will continue to operate autonomously with industry veteran Derek Elbaor serving as the company's new CEO. The acquisition will provide Spartan with access to new resources and expertise to expand the team and enter new markets.

"We are excited about the opportunities that lie ahead as part of Foundation Investment Partners," Elabor said. "With their support, we are confident that we can further elevate our capabilities and better serve our customers while staying true to the principles that have guided us for decades."

Raising Capital And Competing With Unicorns

Fri, 09 Feb 2024 11:22:56 Z

Serial entrepreneur Todd Boyman has been a consumer of plant-based foods for more than three decades. So it shouldn’t be a surprise that his business passion and food passion would eventually combine in a new venture. Hungry Planet is a maker of plant-based meats with fewer calories and less fat than conventional meat and other plant-based options. In March of 2023, Todd joined Smart Business Managing Partner Michael Marzec at the St. Louis Smart Business Dealmakers Conference to talk about launching Hungry Planet and why it raised modest capital compared to its unicorn competitors.

Below is a transcript of Boyman's comments, edited for easier readability.

Todd Boyman

Hi, I'm Todd Boyman, co-founder and CEO of Hungry Planet. We produce plant-based meats. We're known for having the broadest range of meats on the planet. We've got nine different protein types that match the taste, texture, versatility of conventional meat with a healthy profile, and can be used as a one-to-one substitution in all the regular conventional recipes that people are used to. We're based here in St. Louis. We started taking the covers off of what we're doing about three or four years ago. But we started our R&D about 15 years ago.

Michael Marzec

Todd, I don't know if it's correct to describe Hungry Planet as kind of a slow burn for you, but you've kind of had this cooking for a while. How did the business come about? And how is it that you're sort of leading the charge with the company?

Todd Boyman

The origins of Hungry Planet were about 15 years or so ago, when my sister Jody, who's a co-founder of the business, and I and some like-minded individuals, just started to think through what impact we could have that would most directly improve people's personal health and the planet's health.

Having eaten plant-based for over 35 years, and been a serial entrepreneur — spent 10 plus years in China, multiple years in Ukraine — there was there was something missing in terms of how can you really touch people's lives in a meaningful way.

So with that, we just started quietly doing some R&D and said, look, trying to convince people to eat plant-based. Nobody wants to be lectured to about their food, right? But coudl we figure out how to perfectly replicate conventional meat from plants? And we decided to do that in St. Louis. I was born and raised here, but I’ve lived all over the world. I came back here to get this started. Being the breadbasket of the world, the ecosystem here is just extraordinary in terms of the inputs that you use to build these types of products. So that's where it started.

We started taking the covers off of this about four years ago, and are delighted to be here in St. Louis. With our foods, we actually had an opportunity with a group about this size, at one of the largest meat companies on the planet four years ago to serve our food without announcing it in advance that it was plant-based. And none of them knew that they were eating plant-based. So for all you know, your meals were Hungry Planet chicken. I'll leave that to you guys to figure out what exactly you're eating today.

Michael Marzec

Todd, you've been working on Hungry Planet, or at least sort of the concept for 15 years, but you said it's only been in the last few that you sort of took the covers off? What happened? What made it time to do that? Why is now the time for Hungry Planet?

Todd Boyman

When we started this, everyone thought we were crazy They're like plant-based meats, what's that about? Why would you work on that problem? Yet it was very clear to us that our conventional food system consumes enormous amounts of resources. As we started to work on this, we found that the food that we were creating was absolutely spectacular, even seven, eight years ago.

But when we talked with people about it, they had no idea what we were talking about. We'd go talk with chefs, we’d talk with grocers. More often than not, the response that we’d get is ‘OK, plant-based meats, those are animals that you're feeding plants to.’

That was true, even 48 months or so ago. It's really difficult to launch something when there's no frame of reference for what this food is about.

Having been in the software industry for a long time and having done a lot of business in Silicon Valley, I had a lot of investors come to me and say, ‘Why don't you come to Silicon Valley and do what Beyond [Meat] and Impossible are doing.’ Many of you maybe are familiar with those two companies, they both have raised over $2 billion each to launch a much narrower selection than what we're doing.

We decided we didn't want that on our cap table. We knew that our food was great. Let's let the market get broadly educated first. That's a heavy, heavy lift when a new industry is being created and people have no frame of reference for what you're doing.

So why now is that lift has happened. More often than not, when we talk with people they now know what a plant-based meat is. But most people have been really disappointed by what they've had. Most of it just hasn't delivered on the promise of what you would expect if a company had $2 billion to create something. It should just knock your socks off.

The market was educated. The time was right. We knew our food was ready. It was time to take the covers off and start working and bringing it to retail foodservice and then also working with some industrial clients.

Michael Marzec

So you haven't moved us to Silicon Valley and you haven't raised billions but you did do our recent capital raise. Tell us a little bit about that deal.

Todd Boyman

The first funding that we took, for over a decade I funded it with some of my friends. We then in 2019 and 2020, when we were getting geared up knowing that it was time to launch, we brought in about $8 million in a convertible note from a variety of friends and angels, including some people in St. Louis. So thank you very much for those who participated in that.

Then as we were really getting ready to push hard, we went out and we did a $15 million raise that was very quickly closed by just two investors, one of them being Post Holdings here in St. Louis. A great team to work with. And another called TRIREC, which is Impact Fund out of Singapore. Since then we brought it a little bit more. In total, we've raised about $30 million. It pales in comparison to anyone else in this category. Yet what we offer is much broader than anybody else.

Michael Marzec

How can you compete with with them when they have that much capital?

Todd Boyman

I’d like to think it's just good Midwestern sensibilities. When you go and you promise to investors crazy returns, and you raise two billion, you just can't sleep at night, probably, because you're thinking, how is this really going to work?

We had a plan where we knew what it was going to take. And because we de-risked the deal before we went and took other people's money, we actually knew that the food was great. We knew that we had nine different protein types. We knew that we had the nutritional profile. We knew that it would work in every cuisine in any venue anywhere on the planet. So all that was already proven. The money that we raised was really just to build the team, build the co-man network, and then start rolling it out.

So yeah, $2 billion. I've got no idea where all that money went. I'm sure their investors are wondering that as well.

Michael Marzec

As you look at the economic situation, the timing of sort of unwrapping your business and going to market, do you have any concerns with what you're seeing? Or do you feel like you're just kind of at the beginning of a wave in your industry that that's going to continue to grow?

Todd Boyman

Obviously, there are headwinds out there in capital markets that make it more challenging to raise money for just about any type of startup right now.

The other headwind, of course, is in our sector of plant-based meats, there's only one public company, which is Beyond. Their news has just kind of continued to degrade for a lot of reasons: the quality of the product, the execution of that. So that's created interesting challenges when we're talking with customers.

But we found that the underlying demand is still there. It's still growing very rapidly. We launched in the summer with Lion’s Choice here in town. We do an Italian meatball sub with them, which has been really well received. We work with Sandals Resorts, for example, where they sell just an amazing amount of our food. We recently closed LEGOLAND.

We're finding that there really is very strong underlying demand for this type of food. But you’re just never sure what's around the corner. I think anybody who's done a startup, plans never go the way that you think they're going to go. As Mike Tyson said, everyone has a plan until you get punched in the mouth. And we've taken our fair share of blows as people are trying to figure out exactly what is this category. Is this short-term fad? Is it long term trend? But all the data that we see continues to substantiate that this is a long-term trend. People want to eat healthier. They enjoy meat, and if you can give them that delicious, satisfying meal without any sort of sacrifice, there's a lot of headway ahead of us.

But it's not the easiest macroeconomic environment for any startup right now.

Michael Marzec

What's your next step with the company?

Todd Boyman

For us, I think the most exciting next step is what we're looking at internationally. The United States is clearly the biggest market in the world, but when we talk with customers internationally, there's a huge opportunity. Places like Singapore have initiatives where they are wanting to become food secure. They want to be able to do that by the end of this decade. Having discussions with them is really, really interesting.

I was in the Middle East last year. I'm heading over in a couple of days to meet with some folks over there. The meetings that we're having in that region are absolutely fascinating. I was meeting with the Minister of Foreign Trade of one of the countries in the Middle East a year ago, and it was kind of a 15- to 20-minute obligatory, welcome, we'd love to have you here. As he started to learn more and more about what we were doing and the success that we were having, he actually extended that meeting to about an hour and a half, and held off a delegation from South Korea that was there to actually sign a trade deal.

That's pretty extraordinary. When you get that kind of reception from international markets, you understand that you're solving a real problem for these countries that are absolutely food insecure. They know that they need to solve that problem. In the Middle East, for example, when COVID hit, they were using all their commercial airlines to fly in food and doing it very, very quietly so that their populations wouldn't panic. That's not a comfortable position to be in, if you're the ruler of that country.

It's exciting to have those conversations and we think that we can play a significant role in key regions around the world to help bring food security.

Michael Marzec

We only have a couple of minutes left. We've got a lot of other entrepreneurs and founders in the room, investors, some of the some people who will be advising them, what piece of advice can you leave about building strong organizations?

Todd Boyman

It's having a mindset that is ready to deal with everything that's going to come your way that's unforeseen.

In our case, literally, as we were launching the State of Missouri passed legislation that makes what I do, technically illegal. I can get thrown in jail for that. Figuring out how do you navigate that.

We shipped our first container load out to food service 10 days before COVID hit. How do you navigate that? Then literally 48 hours before we closed our Series A, our lead co-manufacturer burned to the ground. I thought our team was pulling a joke on me. How do you navigate that? I called my attorney I said that sounds material to me. I probably need to disclose it, don't I? He said, ‘Absolutely.’

Just having that mindset that things are going to come out of the blue and surprise you. You’ve got to be ready to deal with it and having a great team in place is going to make that possible.

Failure Is OK — And Other Lessons From Rob Hale

Fri, 26 Jan 2024 10:03:27 Z

Rob Hale thinks he's an unlikely person to listen to when it comes to dealmaking. After all, he became a billionaire and lost it all by the age of 35.

But Rob rebounded from the failure of Network Plus to co-found Granite Telecommunications, which made him a billionaire again and made it possible for him to become a co-owner of the NBA's Boston Celtics.

That failure and subsequent rebound yielded three essential business lessons that Rob shared with attendees at the 2023 Boston Smart Business Dealmakers Conference:

It's OK to fail.
Keep your integrity.
Get close to your customers.

Below is a transcript of the podcast's condensed conversation, edited for easier readability.

Rob Hale, co-founder of Granite Telecommunications and Copley Equity Partners; co-owner of the Boston Celtics

First of all, it's a deal conference, right? And the last deal that I did, the only public deal that I did, it ended in bankruptcy. And I lost a billion and a half dollars. So, I'm thinking, Lee, is there still time to get a rebate? Like, honestly, if you guys paid good money for this deal advice, you're probably going to get shortchanged.

My life business is in large part deals, but two primary deals. Maybe we'll talk a little bit about both of those deals.

To give you the backdrop, maybe I'll back up and explain from whence I came.

So I graduated in ‘88. I went to work for MCI in sales, the long distance company.

I do see, half the room is about my age. So those of you my age, just nod like you know what MCI was. My father was an importer and manufacturer of women's apparel to the United States. I was raised in a very entrepreneurial environment. While I was at MCI a couple of customers asked me, ‘Hey, what is this aggregation?’ And I said, ‘I don't know. But I'll look into it.’

As I looked into it, I said to my dad, we can do this. And so my dad and my mom put up $400,000. Not trying to sound cavalier, but $400,000 probably doesn't make or break me right now. What we're talking about is my parents’ nest egg. They bet the farm on me.

At the ripe age of 23 in 1990 we started a company called Network Plus. My folks were the funders and I was the founder.

In 1990 we lost money. From ‘91 to ’98, we grew profitably. This is the onset of my first deal.

In ‘98 Goldman Sachs cold calls me and says, ‘Hey, you want to do a bond offering?’ And I say, ‘Listen, I'm a phone guy. I'm not a finance guy. I don't even know what a bond offering is.’ They say, ‘If you do a bond offering, you can do an IPO and you will be a billionaire.’ And I said, ‘I love bond offerings. Let's do a bond offering.’

So we did what they said. To be honest, what they said was going to happen happened. We did an IPO.

This was 1999. These are the sexy times of CLECs [competitive local exchange carriers]. Some of you are old enough to know what's CLECs were. In ‘99, we were one of the more sexy things in all of Wall Street. We were one of those stocks — remember a couple years ago, and all of you are old enough to remember this couple of years ago, when the demand was so high for an IPO, the stock was supposed to start trading at a certain level; the demand was so high, it didn't trade ‘til a much higher level — that's what happened to us.

We were supposed to open at 16. We didn't open ‘til $26 per share. Over the next eight, nine months, the stock got to 63. I had 24 million shares, so I had $1.4 billion next to my name. According to Forbes at the time I was the seventh-wealthiest guy in the world under 40.

It's ironic how the world turns, but a bubble burst in March of 2000. That bubble felt like it burst primarily in my face. The stock for eight or nine months, it could only go like this [up]. For the next 18 months, literally, it only went like this [down].

Fall of 2000, Goldman and Fleet and CSFB, which are our banks, call us and say, ‘Hey, you have a credit line, it's going to expire. And we're not going to renew it.’

We were EBITDA positive. We'd never missed our covenants. They just said we don't bank CLECs anymore. February 4, 2002. I hit bottom. February 4, 2002, we went bankrupt. So that stock that had been a $1.4 billion, for me it became officially and finally zero. And I'd never sold a penny a share. It was over.

That morning, it got worse. At heart, I'm a sales guy. There were 400 sales guys that work there. I think and I hope most of them joined because they trusted me. We got debtor-in-possession financing, which is financing you take into bankruptcy. The contingency of that was I had to let go the whole sales force.

February 4 at 10 in the morning, I had to run a conference call with 400 people and say, ‘Listen, you guys trusted me. I've betrayed you. You don't have jobs anymore.’

It gets worse that afternoon with the phone calls, my wife's at home with a 2-year-old, 4-year-old and a 6-year-old. She picks up the phone and the guy on the end of the call says because of what your husband has done, I'm coming to kill you.

First lesson that I learned in deals. First, keep your integrity — and we'll talk about that in one minute —but second, it's okay to fail.

As Jerry mentioned, some cool things have happened in my life. They all happened after 2002. And if we're really entrepreneurs — and I think most of us in this room are — unless you push a hard, you won't fail. But if you don't push hard, then you're not going to fail. Don’t worry about it. As long as you keep your integrity, you can compete again.

So lesson No. 1 for me: Don't fear failure.

Lesson No. 2. At the end, that last couple of quarters, we're a public company. Anybody who's run a public company knows, I call it the 90-day guillotine, you just got to make your numbers. The CEO of Qwest, other leaders of Qwest, call me and they say, ‘Hey, listen, you want to do fiber swaps.’ And I don't really know what they are. I won't get into great detail. It's a way to take CapEx and make it up OpEx. That's what it is. So, I say, yeah. I mean, like a couple of million in easy earnings. Why wouldn't I want to do that?

I asked our CFO — and I'll be forever indebted to him, Bob Cobuzzi, an old salt — he goes, ‘I don't think we should do that, but I'll ask PwC.’ PwC comes back and says, ‘I don't think you should do that.’

I go back to Qwest and I said, I don't think we should do this. Why? And I explained, he said, ‘Listen, let's be clear. You're a $250 million pissant and we're a $20 billion CLEC. Arthur Andersen is the same thing as PwC. And they say you can do this, so what difference does it make if another Big 5 firm says you can't?’

I go back to my guys and I say, ‘Listen, Bob, you sure? This is an easy $2-3 million a quarter. Like this really helps.’ ‘I'll ask again.’ PwC: ‘Rob, we strongly advise you not to do that.’ And remember, I'm CEO, so it’s my choice.

We don't do it. We went bankrupt. And I'm certain we would have gone bankrupt just a quarter or two later. CEO of Qwest? Jail. Guys who ran those transactions for him? Banned from public industry for life. Arthur Andersen? They're not here today are they?

So lesson No. 2: ‘Rather fail with honor than succeed through fraud.’ It's okay to fail. If you keep your honor, you can compete again.

Topic No. 3. Granite. February 4 of 2002 we went bankrupt. March 15, 2002, we got sold at auction. June 3, 2002, we started Granite. We were going to do essentially the same thing.

Our industry and Wall Street said the only way to create value in the phone business is to build switches and network infrastructure to control the customer. That's how you create value. That's what everyone had always done. And honestly, that's what we set out to do at Granite.

We got very lucky. We didn't have any money. My father and I loaned a million bucks to Granite.

There were 43 public CLECs; 41 had gone through restructuring between ‘99 and 2002. You couldn't have raised money in the public markets if you had the fountain of youth. Whatever you had is what you were going to play with.

We did a wholesale deal just to get into the game. We wholesale phone lines.

Walmart [and] Walgreens, said let's test this idea. We tested it in Boston stores. Then they said let's consolidate and discount all of New England. And they said let's consolidate and discount aggregate all of the Northeast.

Almost the same day they brought us back to Bentonville and Chicago and they said, ‘Hey, this wholesaling, this is good. We're going to do this for the rest of the country. We may or may not do it with you, but we're going to do it for the rest of the country.’

So by the time the wheels touch home, we — I — had to make a decision. Are we going to do what Wall Street and our industry said is the way you create a company? Which is to build regional structure, physical network. Or are we going to become essentially a national aggregator?

So as we sit here today — and as Jerry mentioned, I'm very lucky to have a lot of cool things in my life, and we've created 2,500 American jobs and we get awards for Entrepreneur of the Year and all that stuff — people say to me, ‘How'd you get that great idea?’ We didn't? They did. We listened to them, and then followed that path and just worked our tails off.

So final lesson I would give to dealmakers: Get close to your customers. They'll tell you what matters.

Cavs CEO Nic Barlage On Creating A Winning Culture

Fri, 19 Jan 2024 12:00:00 Z

Human capital and corporate culture play a key role in most M&A transactions. For Episode 260 of the Smart Business Dealmakers Podcast, we turned to a different sort of business leader to talk about asset management, team building and creating a winning culture — in a very literal sense.

Nic Barlage is CEO of Rock Entertainment Group and its many holdings, including the NBA’s Cleveland Cavaliers. He oversees more than 500 full-time team members throughout the business operations of the Cavaliers.

Nic sat down with Smart Business Chief Content Officer Dustin Klein at the 2023 Cleveland Smart Business Dealmakers Conference in June 2023 to discuss talent acquisition and development, building a winning culture and the importance of leadership.

Below is a transcript of the podcast's condensed conversation, edited for easier readability.

Dustin Klein

Well, Nick, it's great to sit down with you. We had a chance to talk a little bit before today and not just about your background, but about all the great things that are going on with the Cavaliers and rock Entertainment Group. So I want to start by just kind of having you set the scene. So people who are not understand exactly what rock Entertainment Group is, because there's a lot of entities under this umbrella. There's teams, there's venues, so if you could just kind of shed a little light on that, for those who may not know.

Nic Barlage

REG, as we call it in short form, Rock Entertainment Group is really anything Dan Gilbert that’s sports and entertainment related, just to keep it very simple. We have a PGA Tour event, the Rocket Mortgage Classic in Detroit. We have our properties here, which are the [Cleveland Cavaliers], the [Lake Erie] Monsters, the [Cleveland] Charge.

We have two interests in eSports teams — one here in Cleveland, which is the Cavs Legion GC, and then one in Culver City, California, which is 100 Thieves, which in the last valuation I believe was the second most valuable eSports operation in the world as it sits right now, which is a fascinating business unto itself.

Then we we've also started to kind of take what we do within our four walls and bring it to market. So we're helping out Tennis in the Land this year, which is a WTA 250 event, helping to sell and market and kind of build the profile of that event.

And so and our hope with that is, you know, REG kind of our thesis, if you will, for those of you that are in investing, the thesis is really how can we harness all the great things we see on the coasts, whether that’s in New York or LA or other places. We kind of have this mantra internally that Dan's established with us, which is, ‘Look, the coasts shouldn't be the only place people have to go to have fun. We can do it right in our own backyard. And we can do it by aggregating these assets and these resources and lifting communities.’ And so that's really what the goal of Rock Entertainment Group is, and something that we're very focused on how we continue to serve our communities through sports and entertainment.

Dustin Klein

So let's talk a little bit about basketball and business. Since 2019, the Cavs have assembled key pieces of talent to build a winning team post LeBron. You've mentioned in our discussion that there's a development arc for every team. Share more about what you mean by that, and how you've been able to bring all these pieces together over the past three, five and even seven years.

Nic Barlage

Yeah, I think a lot of it — and everyone in here has a business or is around business — we think about these things over periods of time, right? As we map things out, whether it's business plans, or what we call clarity planning in our in our business. You look at it over a three-, four-, five- or six-year period of time.

The hard part in our business is you can't really predict certain things. You can't predict where a player is going to go via free agency, which we had two of those notable in the last 15 years. You can't predict where these we're certain things may come from.

But it actually started in the ’17-‘18 season, which was the last year that we made the Finals. One of the biggest things we did during that season, we sat down in early October and we said, ‘Hey, we're going to plan vehemently for two scenarios. We're going to plan that we're still a Finals contending team and all that that meant. I don't even need to go into the personnel because this room knows it well. And then we're going to plan for if we need to build this thing back up. And if we need to reload.

And so from that perspective, we spent a ton of time, and for those of you that remember in 2018, we started that on the business side, I want to be clear and how we kind of built and structured our business from a terms and we really wanted to give ourselves kind of five years of sustainability.

On the basketball side for those of you that follow it closely in 2018, we were still pretty good team. We were a championship contending team. The trade deadline February of 2018, we changed out 11 players on a 15-person roster. And not everybody remembers that.

But what we did was we changed out a lot of parts and pieces and brought in a lot of parts and pieces that we felt like could help us in that run. But then, also, we could use those parts and pieces if we weren't in a run to flip those into draft assets and draft capital: first round picks, second round picks, so on and so forth, likes of Jordan Clarkson, Rodney Hood, Larry Nance, Jr.

Going back to the core of your question, and this is really the genius of Koby Altman, I want to be clear I president of basketball operations, we said, look, if we're going to reset after the ’17-‘18 season, we went and studied all the competitive arcs in the NBA. So on average, a team that is a contending team — which is in our mind is the top four teams in the league — a contending arc range is somewhere between four and six years. You have some anomalies. If you study this over the course of a period of time, there's some anomalies. There's dynasties, obviously. Golden State is on kind of an eight-year tear right now. But given free agency, given contract length, given age of player, that arc is somewhere between four and six years.

So we said, hey, we want to start striding out. If we're in a reset mode, coming off of the ’17-‘18 season, we want to start striding out somewhere two to three years beyond that. So that as we're starting our ascent, some of these really competitive teams are actually on their descent. And you can't predict these things, right. But you can get very analytical and I won't bore you all with what that means.

So we really said, look, if we can start to be taking steps forward by the ‘21-‘22 or the ’22-‘23 season, that's really what we want to be focused on.

For those of you that buy tickets, and all those things, it doesn't mean we're giving up I want to be clear. It just means that we wanted to be very strategic in how we were structuring one of our main assets, which from our perspective is obviously is the team we put on the court every single night.

So we set forth on that journey. Obviously, we were dealt the cards we were dealt going into the ’18-‘19 season. And then the ’19-‘20 season was a shortened season due to COVID. And even the ’20-‘21 season was a shortened season due to COVID.

The thing I give our group a lot of credit for is coming out of that 2021 season, there was a lot of noise out there. We were not a good team. It was a 52-game regular season schedule for those you that remember it, and we were getting hit pretty hard.

That summer we traded for Lauri Markkanen. We also drafted Darius Garland for those of you that remember. Isaac Okoro. I'm reading a little bit because I want to make sure I got the years right as I go through it. But I remember all the players. And then obviously Evan Mobley.

But going back to that 2018 trade deadline, we were able to capture between that trade deadline and the next two trade deadlines, we were able to capture for additional first round picks.

And you say, ‘Who gives us a sh… Who cares? Like that's not that big of a deal.’ I can probably do that in this room. But we that was really important to us because we knew like this is Cleveland, Ohio, and we love Cleveland, Ohio. We love Northeast Ohio. But the likelihood of a top-tier free agent choosing Cleveland, Ohio, over Los Angeles or New York or Chicago, it's just not likely. So that means that we got to bet our bets in the trade market.

As we did that, we assembled a ton of assets. And once again, this is Koby’s savant-ness in all of this. As we were able to build this great young core, ’21-’22 surprised the hell out of us, I'm not gonna lie. We didn't think we had a 40-win team under the hood. We thought we'd be pretty good. We thought we'd give you all something to look forward to. But it kind of came together a little bit quicker than we thought.

So going into ’22-‘23, which was a really incredible year for us, we had all these assets. And we always sit around and say, ‘When are we going to push go?’ Like, when are we really going to push go? We went back to our arc model, we studied it, we said, hey, look, there's really only a couple of teams that have a similar arc that we have given we've got our average starting lineup this last year was 23 years of age. We start lining up all these kinds of KPIs like all of you do in all of your businesses every single day. But you start to line some of these things up and you say, ‘Hey, look, our best years are actually, if you think about it, are ’23-’24 and then the next four years beyond that.’ If we can keep everybody and sign everybody and all that good stuff, which by the way, we feel pretty good about today, but we're not going to bet on anything in that regard.

Then the Donvan [Mitchell] opportunity came. We actually submitted our first-ever trade proposal for Donovan right after the NBA Draft. I mean, it was like right before July 1^st. Nobody knew about it. Nobody heard about it. We don't try to live our life in the headlines like other teams do. We try to be very, very, very practical about this because we're really focused on the culture we've established within our group. If your name is out in the newspaper, that you can be traded every other day, you're probably not going to think too highly of the place that you're going to be.

We went through a three-month process and we said, ‘Look, this is too good to be true.’ An incredible All-Star who's got three years left on his contract as of last summer. A very affordable rookie-scale max contract, which is still $30 million a year, which is a lot of money. But in our world, it's a very practical situation.

So we kind of went all in and this year [’22-’23 season] is what the outcome of that was, which was a great year, with a lot left to go. We don't feel like losing in the first round is something that we are OK with. We kind of have these philosophies internally. And one of them is adversity creates opportunity. And we think the adversity we went through this last season will really be what feeds into the opportunity that we have, as we continue to grow on the basketball court.

Dustin Klein

Really interesting how you've approached that. But one thing I'm interested in is how did your organization communicate with season ticket holders, with partners, with sponsors about what you guys were doing? I mean, I see Steve Demetriou over here who we’ve seen on TV with the court seats during the championship game and otherwise. Folks like that who had been supporters through thick and thin and you guys put together this plan to kind of remake the team. What did you tell them? Did you say. ‘Trust us, we know what we're doing?’ Or did you say, ‘Here's what our plan is for the future so that we know that when we get there that you're still with us?’

Nic Barlage

I think first thing, we were very deliberate. But just even in the wording that we use the nomenclature we put in the marketplace. We at no point in time or ever talking about a rebuild. We didn't want that out in the market, we talked about a reload. And I think that's a very small mentality difference.

Honestly, I think it starts internally first. You have to have a team of people bought into what's going on. Because really, at the end of the day, like, I can go, I can go talk to Steve or I can go talk to anybody in this room and be like, ‘Hey, stay with us, stay with us, stay with us.’ At some point in time, they look back at me and be like, ‘You guys suck. We're out.’ You know, I mean, it's just the nature of the business. It's a zero-sum game.

Honestly, COVID kind of helped in this way. Because we were put on pause for about 18 months. Everyone's business was impacted by COVID. I always say other businesses caught a cough, we caught pneumonia in the sports and entertainment industry because we were a large-gathering business. The one thing we did — and I give our chairman Dan a lot of credit because he gave us the resources to be able to do this because we were not making money, we were losing a lot of money — we said let's put money in numbers aside, like we are not going to let those things lead us through COVID. What we're going to let us lead through COVID is we're going to build upon our relationships, we're going to make sure that we maintain the team we have internally, and we're going to invest in our clients, and we're going to invest in our team members.

Ultimately, what that allowed us to do was to fortify relationships that we have with stakeholders to get to a level I always say there's like this, this paradigm of a relationship where you have their attention, you establish credibility, and then you gain their trust.

The entire time, as we were going through COVID, we were focused on how do we get to that level of trust. If we get to that level of trust, we could be bad for five years. We could be bad for seven years, which we didn't think was going to happen. But people will trust us to a certain degree with their investment. They may not want to invest as much. They may invest a little less, but they're still engaged. And we thought that that was really, really, really important when we thought about the relationship we had with the marketplace.

We didn't ask for a bill. We didn't ask for an invoice to be paid. We didn't do a lot of those things. We rolled a bunch of credits over and did a bunch of different things. Then we just focused on how we could get face to face with as many people as possible.

I think that's really important in the kind of qualitative side of it. When you think about the quantitative side of it, and the strategic strategic side of it, I think it's also important when we were going through the run, Dan had spent more on any team in the history of the NBA ever at the time. Now the Golden State Warriors have blown that out of the water in the last couple of years, but that also was a good sign, I think, to our fan base that look when it's time to go all in, we're always all in. But when it's time to really go all in financially, we have some credibility to fall back upon. And so we really tried to make sure that we fortified that during those kinds of two or three years of choppy waters.

Dustin Klein

In spite of the wins and losses that you guys had on the court, one of the things that's been so impressive with the organization itself and with Dan's other companies, is the way you guys have been able to build and sustain a winning culture off the court, or in the boardroom or whatever it is with Dan's companies and with the team here in Cleveland. How have you been able to get and keep everybody on the same page?

Nic Barlage

This is what we talk all the time about. I think in any business, the culture and the environment that you curate is ultimately what determines how successful you're going to be. For us, I tell our leaders all the time, if you wake up in the morning and you have a to-do list, or maybe you're looking for something to do, default to your people. Default to our culture.

We have what we call cultural rules within our four walls. One is if you have a direct report, you have to meet with that direct report at least every 30 days. Face to face, or obviously during whatever it was video conference.

We have other things. Every two weeks our business leaders get together just to share what's going on in the business. I think communication and transparency are so incredibly important.

Dan has his isms, which I'm sure some of you have heard about. It's really his book of all things culture. And one of the things we struggled with as a franchise for a while was how do we distill those into who we are. Those isms have been created from a mortgage company that is one of the, if not the, most successful mortgage businesses in the country. But they didn't always apply totally to us.

We went through a whole process about three years ago where we created our mission, we created our vision, we created our values. I'm sure a lot of you have already done this. You're like, yeah, that's so easy, but we didn't have that. We needed to figure out what was our cultural DNA.

I always said to our leadership group, if one of your team members gets stopped at Giant Eagle and they say that they work for the Cavaliers, how are they going to describe us? Not talk about Donovan Mitchell and Evan Mobley and Darius Garland, but how are they going to describe our organization as a place to work.

The silence we got in the room when we did that was a very key moment in time for us to say we have to put some true understanding to that, we have to we have to truly put some description to that. I think that ultimately created alignment within our culture.

I tell people this all time, I think our jobs as leaders in businesses, we actually sit at the bottom of the org chart. We don't sit at the top of the org chart. It's our job to really serve the rest of the organization.

It's done, like I said, through many, many, many one on ones, it's done through many different constructs of communication. But it's also done with the prioritization that it starts and stops with the environment and the culture that we create.

You have to have alignment. J.B. [Bickerstaff], myself, Koby, we are more aligned than I've seen in 17 years of being in the NBA. It's because we talk a lot. We like each other. We get in the room. If we have differences, which we have many of them, especially over business and basketball, it's the most far divided thought process you can think about. But it works because we're constantly connected. And I think the other thing too is whenever you're thinking about a great culture, you have to have a system and constructs in place that promote it, allow it to permeate, and then reward it as you get into it.

Whether that's our performance management system, or whether that's different things that we have, as we go through the last couple of years, coming out of COVID, we've promoted roughly about 14% of our company every year into different jobs. That's meaningful because 68% of our business is under the age of 35 from a team member perspective, so they're constantly looking for what's next.

I think it's important for us not to roll our eyes at them, but to embrace that and try to put them on a development plan to be a part of a bigger purpose than just a paycheck every two weeks. And those are things that we've really tried to institute in all of our kind of synapses with what I call the heartbeat of our business, which is really at the end of the day middle management is the description that I think people would use for it. It's a kind of a scatterplot of inputs to get us to a place culturally.

The other thing is when I first started back here six years ago, a guy grabbed me and he said, ‘How long do you think it's going to take to turn the culture around?’ On the business side, the culture I thought was pretty good, but they felt like it could be improved.

And I said, ‘Hold on, like, you're going to ask me for a timeline?’ And he said, he said, ‘Yeah, I want to timeline.’ And I said, ‘That's where you're wrong. There is no timeline. There's no finish line to a great culture.’ It's like you've accomplished something and you're relentless in how you pursue the next thing relative to culture in the environment that you work in.

If you're waiting for an aha moment, you're not going to get it. You should probably try to find it somewhere else. But just know that there's going to be a commitment and a relentlessness to pursuing this. Every day we're going to get a step better and a step bigger. We're going to take a step forward. I think that at least put it in perspective and allowed us to make progress in some of those things.

Dustin Klein

What's really fascinating about it is the parallels between having the right pieces in place for the team on the court, and the pieces in place for the management team and for the operations that you have. As it relates to the operations, you can't plug them into a matrix the same way you can and look at the skill sets that you would have the players or even the coach. What have you done to try to codify that in such a way that you're making sure you've got, as you mentioned, these opportunities for the younger folks to be able to rise through the ranks, but at the same time have this very positive culture that it's not just a winning culture but a culture that wants to continue to improve. How do you identify and codify those folks?

Nic Barlage

I think first for us, we went through a really kind of a big renovation, overhaul of our performance management system. As you can imagine, there was this 45-minute sit down and be talked at by your by your leader, which I just hated that coming through the ranks. I'll be honest with you.

What we did was we spent six months going through, we had 12 different focus groups across the organization, just cross sectional people. We totally changed it. We rebranded it first and foremost, which we think that the packaging is just as important as the contents in a lot of the things that we all do.

The second thing was, my biggest thing was I wanted us to start with the personal side first. If you sit down and you have a game plan review with somebody in our company, the first thing you're going to be asked to do is identify three to five personal goals you want to accomplish in the next 12 months.

I think that's important because as leaders, it gives us what I call hooks into our team members. It gives us equity into what they're thinking about, what's important to them. Then they develop their own personal goals. Then we develop things we want to accomplish together. Then feedback from the leader. Then next steps.

If you think about it, that the percentage of a performance management view before we did this, it was about 95 percent of the leader talking at the team member. We tried to flip it to say let's get to 70 percent of the team member providing us feedback to the team leader. And I think we saw instant gain from that.

Now we're at a place where we're three, three and a half years into it, we’ve got to renovate it again. It's just one of those things, going back to that kind of relentless comment. If you just assume it's going to work and continue to work because we did it really well three years ago, it's starting to flatline again.

We've got to change it.

In sports, on the business side in particular, you don't get into right away to get rich, it's just inot as well paying as probably some of your entry level jobs are in this room. But one of the things we've been really focused on is the holistic team member experience. What we've done is really tried to, from an articulation perspective to our group, is put together not just their compensation, not just their benefits, but this whole host of other things, whether it's flex hours or whether it's time off in the summer times or if it's sabbaticals. Some of these things are like, we've been doing that for a long time. We had it.

And I think the other thing we we've done a nice job of in the last six or seven months, is stitch all of that together. Now we talk about your holistic team member experience and the value proposition you have as a team member for Rock Entertainment Group. Not just, here's your base salary, here's your bonus, here are your goals here, which is what you need to go accomplish. We really try to bring all of that together. We've seen in the last two or three years, by taking this kind of approach, pre-pandemic, our turnover levels were about 24 to 28 percent. We got a lot of young people, like I mentioned earlier, and we got a lot of new people in jobs and so that turnover rate is pretty significant. We dropped it to about 12 to 14 percent during the pandemic. And then this last fiscal year, we were somewhere between 6 and 7 percent.

I think a lot of that has to do with, one, being very transparent, having constructs, as I mentioned earlier, that promote communication two ways. And then also, quite frankly, just telling a better story to your team members. Stitching these things together in a way that isn't so traditional, maybe, in thinking all the time. But it's in a way that resonates with a kind of a new generation of workers or what I call a modern generation of workers and team members. That's been successful for us. Not perfect. I want to be clear, there's no utopia out there. But we've been able to see some gains.

Dustin Klein

I want to shift for the last about seven minutes or so to some personal questions for you. Just a little bi getting to know you a little bit better on this stuff. And I'm going to ask you, might be a weird question. But I was lucky enough about eight, nine years ago, I had a chance to talk to Billy Beane. I asked him, you know, player, sports fan, baseball fan. And I said, how do you separate being a huge sports fan, having come up through there, with being a sports executive? How do you do both and balance those? And I'm sure you are a huge sports fan. And how do you balance that with being a sports executive?

Nic Barlage

It's a great question. I would say this, this is all I've known. I played basketball through college, small little D-III school. I wasn’t going to play anywhere after that. I had this counselor in school asked me he's like, ‘What are you passionate about?’ And I literally wrote down basketball, baseball and football.

He goes, ‘The best form of anything you can do in your life is if what you're passionate about determines what you do.’ I kind of thought about that and I let that linger. And he's like, so why don't you go get a career in sports. And I was like, I didn't even know those existed.

You mentioned Billy Beane. At the time when I was in school, it was Theo Epstein was just named General Manager of the Boston Red Sox. He was 28 or 26 years old or something like that. And I just said this looks amazing. So I became kind of infatuated with it and then researched it and then got some internships and then started selling tickets out of a box office in Phoenix and then worked my way up.

But I think the thing you learned about five years in, the fandom is kind of gone. Don’t get me wrong, I cheer like hell for the Cavs. Anybody that sits near me, I feel bad for them, especially in a playoff run. But I would say this, you really learn to separate it naturally. You kind of become classically conditioned that this is a business. And when you see a napkin on the ground walking the concourse, you pick it up, it's like your home. You see every single seat in the building as an opportunity and as a way to engage with the community. And your mindset just totally shifts.

It doesn't ruin it for me. I love it. I've seen it ruin it for some people, I will be very candid and very, very transparent. But I think it's just something as you go through it, you transition that passion into this kind of productive and impactful mentality around what you can do with the platform.

Not that you ever lose the fandom, but you really don't go to a game or an event much as a fan anymore. I will say this, I also don't really go to a lot of other events outside of Cleveland, Ohio, because there's just so much care you have for it. And honestly, if I don't have to be around 20,000 people on my day off, I probably won't be around 20,000 people on my day off. You learn to love it, But you just learn to love it differently.

Dustin Klein

Billy gave me a similar answer, except he was a little bit more colorful in his language. But I want to switch to another area. As a leader, we all have people we lean on, we counsel from, but at the end of the day, as a leader, you are making decisions by yourself. At the end of the day, it does fall back on whatever your role and responsibility is. I'm interested in two things: One is what drives you as a leader each day. But the second piece to that is what keeps you up at night.

Nic Barlage

First, what drives me is, is our team is our people. When you get into leadership, no matter what level you're in, you have to at some point check it and say this isn't about me anymore. This is about everybody else. Our people.

June 12 and June 19 of this year, which those are the two weeks we announced promotions across the company — and we do it throughout the course of the year, but that's our big time to announce big promotions, I think it's 79 promotions this year — It's like my favorite time. It's really this time where we get to honor all the hard work of all the people that do and make this thing work way more than I do. It's our people. First and foremost.

I think second what really motivates me is this almost this kind of fear of not making enough of an impact. And I don't think you fear it, you embrace it. But it's like when I go to bed at night, it's like the things that run through my head are, ‘God, we could have done this better, we could have done that better, we could have got more out of this meeting. I could have been more intentional about that interaction, or I could have got this handwritten note out.’ And so it's this kind of like relentless evaluation of yourself that I think is really important.

Last, and certainly not least — these are not in priority order — my wife's not here, but it's our family I think at the end of the day. I’ve got two little daughters and a great wife. You do those things to help support them in their journeys. I think that's something to not lose sight of.

Dustin Klein

We’ve got time for about one or two more questions. Did you have a mentor coming up through the ranks that took you under his wing or her wing and was able to tell you when you were down that things were going to get better? That you were able to get some sage advice from?

Nic Barlage

I think it's by committee, honestly. I think it's really important to have a lot of mentors. Dan has been probably my biggest.

I was 24, 25 years old in 2010. I don’t know if you guys remember what happened in the summer of 2010. It was a pretty weird time for us. We sat in a conference room, and there's a few of us in the conference room. He just said, ‘Hey, who can I direct all the fan inquiries to?’

And it was like 45 seconds of silence. I kind of raised my hand and I see Randy sitting here — it was like a group of ticketing people and Randy was on the other side of our business. I kind of raised my hand and he goes, ‘What's your name?’ I gave him my cell phone number, which is best thing that I ever did, but also worst thing I ever did for the next eight months of my life.

And literally for the next eight months, he would call, text. People that have worked with Dan would know, it was a 24/7 job. But it built a relationship with him. And I got to see behind the curtain of how he saw things. To be able to get that at 2425 years old with a guy that can see around not just the next corner, but the corner after that. You can't get it from an education. I can promise you that.

And so I'd say Dan, I would say I learned a lot from watching Adam Silver. I interact with him quite a bit now. He's just a very cerebral guy.

I think it's important to have mentors. Outside. You mentioned Steve [Demetriou]. Steve has been a mentor of mine for a long, long, long time. I grew up as a kid that, you know, middle class kid in the middle of nowhere in Minnesota. And just to have somebody's perspective like Steve to bounce things off of, whether it's how you structure your employment agreement, which I never even knew existed. He's laughing because he knows because I'll call him late at night and go, ‘This is what’s going on.’ This was this was probably four or five years ago.

So I've got a whole team of those type of people. Len Komorowski I’d put in that bucket, too. I've learned a lot from Len just about the business and different things. I think every stop in my career there has been a mentor, but those would be the four or five I've kind of carried with me throughout throughout my entire career.

Dustin Klein

So fast forward from 2010 to 2023. What sage piece of advice do you have for the folks out there as a closing thought?

Nic Barlage

I do believe this as a city, as a region — and this is not me drinking the Kool-Aid and as a team as well as an organization — I'm really bullish. I think our best years are in front of us.

If you think about what we were able to harness as a region in the mid-2010s, between the RNC and the championship runs and all the great stuff. The development that happened in Cleveland.

I think the greatest moments of momentum come before you actually see it. I think that's right where we are between what you're seeing with Sherwin Williams and the tower they're building, I think our riverfront project. I think the waterfront development. I think having public officials in Mayor Bibb and County Executive Ronayne that are aligned, that are communicating, that care and have an energy about the city — those things add up.

We've been studying this a little bit and doing our homework on what got Nashville to where Nashville is today. It's not Nashville today; it's the decisions they made 20 years ago. Same thing you've seen in microcosm in Columbus or Indianapolis or Charlotte or Phoenix to a certain degree. I just think we've got a lot of those foundational pieces that are starting to get put down. Now it's going to become about us doing it.

Somebody asked me the other day, ‘Why would Dan, want to put all this money in the riverfront? It's kind of the armpit of downtown.’ And my response was — which I appreciate by the way, I think it's not that far off, It doesn't look good right now, let's be honest — but I think there's two schools of thought, I think there's a school of thought where you can wait for the momentum and you can ride that momentum, or you can create that momentum.

We're choosing to try to do the latter every single day, which is we're trying to create our own momentum within the city. That momentum starts to become a snowball effect. We've seen it in Detroit. We are firm believers that we can harness that same type of strategy and that same type of mentality and approach and we can deploy it here in Cleveland and Northeast Ohio. I go back to overarchingly, why can't we do and accomplish right here in the Upper Midwest what everybody else sets out to do, whether it’s on the East Coast, the West Coast or in the southern region of this country. We think we have that chance because the common denominator — and this last thing I'll say — we have so many great people here.

When we were going through the NBA All-Star planning process, our internal mantra — I don't know if David Gilbert's here or not — but we firmly believe we in Cleveland have world-class assets without world-class egos. We think that that can be a separation and a differentiator for us as a city because every time you talk about Cleveland, there's an affinity, there's a care, there's a passion.

It's not because we have a lake or a river or we have some buildings. I's because it permeates amongst the people that live, work and play in this city. It's how do we harness that? And how do we create our own momentum?

Sikich acquires Thornhill Financial

Fri, 10 Nov 2023 12:00:00 Z

Chicago-based Sikich LLP is acquiring Cleveland-based acocunting firm Thornhill Financial. This move, which Sikich described as a significant part of its expansion strategy, is focused on enhancing its presence in the Northeast Ohio market. The deal is expected to be finalized by Nov. 30.

The acquisition of Thornhill Financial is part of Sikich's broader strategy to enhance its service capabilities and geographical reach.

"Northeast Ohio is a priority market for Sikich," said Jason Tuma, the Northeast Ohio market expansion leader at Sikich.

Thornhill Financial caters to sectors such as manufacturing, construction, and private equity. The firm specializes in individual and business tax planning, compliance, employee benefit plan audits, restructuring and estate planning. It also has a strong focus on high net worth clients.

Post-acquisition, the Thornhill Financial team will continue operating from their existing office while integrating some Sikich employees.

Sikich, which specializes in technology-enabled professional services, employs over 1,600 people and serves a diverse clientele, including corporations, non-profits, and government entities.

Platinum Equity Sells Stake In Vertiv

Thu, 10 Aug 2023 12:00:00 Z

VPE Holdings, an affiliate of Platinum Equity, completed a secondary offering of 20 million shares of Class A common stock in Columbus-based Vertiv Holdings Co., a global provider of critical digital infrastructure and continuity solutions.

The 5.3% stake was sold August 9 at a price of $34.91 per share, yielding $698.2 million for Platinum Equity.

Penhall Buys Mid-Ohio Concrete

Tue, 08 Aug 2023 12:00:00 Z

Irving, Texas-based Penhall Co., a provider of concrete services in North America, has acquired Hebron-based Mid-Ohio Concrete Cutting. Penhall also hired the former employees of Mid-Ohio who worked in the Columbus office.

Terms of the deal were not disclosed.

Penhall, which was founded in 1957, has more than 40 offices in the United States and Canada. It offers various services to the construction industry, such as concrete cutting and coring, concrete breaking, specialized demolition, scanning and locating concrete structures and utilities, strengthening concrete with fiber-reinforced polymer, grinding and grooving concrete surfaces and bridge services.

The purchase will help Penhall expand its services and reach more customers in Central Ohio and surrounding markets, according to Greg Rice, the CEO of Penhall.

Mid-Ohio Concrete Cutting has been operating since 2008 and offers a range of concrete solutions to its clients. Brian Samsal, the owner of Mid-Ohio, will join Penhall.

Penhall is owned by Centerbridge Partners.

Cordance buys Columbus-based WebPresented

Thu, 03 Aug 2023 12:00:00 Z

Business software provider Cordance has acquired Columbus-based WebPresented, a software company specializing in interactive video technology. Terms of the deal were not disclosed.

The acquisition will allow Raleigh, N.C.-based Cordance to integrate WebPresented's interactive video and virtual event capabilities into its suite of business software products. Cordance provides tools for sales, marketing and customer service teams.

"With the addition of WebPresented's innovative video technology, we'll be able to offer our customers new ways to engage prospects and customers," Cordance Chief Executive Jane Smith said in a statement.

WebPresented's interactive video software allows presenters to insert questions, polls and other interactive elements into pre-recorded videos. Viewers can respond in real-time, providing two-way communication between presenter and audience.

The company's virtual event platform also facilitates live video sessions with audience participation features like chat, Q&A and surveys.

"We're thrilled to join forces with Cordance to make our interactive video and virtual event technologies available to many more customers," WebPresented CEO Michael Brown said.

Cordance said the integration of WebPresented's products will happen over the next few months.

Bonzo Acquired By Mobility Market Intelligence

Wed, 02 Aug 2023 12:00:00 Z

Mobility Market Intelligence, a provider of mortgage lending software, has acquired Columbus-based Bonzo, a customer relationship management platform for the mortgage and real estate industry.

Terms of the deal weren't disclosed.

Salty Lake City-based MMI said the acquisition will allow it to expand its suite of mortgage technology products at a time when demand for digital solutions in the home lending market is rising.

“MMI’s acquisition of Bonzo is the next logical step in the path we’ve been pursuing for the past year or more, which is to deliver cost-efficient, best-in-breed solutions to the mortgage industry in a consolidated, easy-to-use, integrated environment,” MMI CEO Ben Teerlink said in a statement.

Bonzo is a CRM platform for mortgage advisors and real estate agents. It combines tools for acquiring, converting and retaining clients in a single interface to efficiently engage clients and prospects.

The Bonzo leadership team, including founder and president Jason Perkins, founder and COO/CRO Miles Miller, and CEO Chad Jampedro, will continue to run the company as it operates as an independent service.

DASI Simulations raised $2.95 million in capital

Wed, 26 Jul 2023 12:00:00 Z

Columbus-based DASI Simulations raised $2.95 million in venture capital in a convertible note from unnamed investors on July 24.

The medical technology company uses advanced computational modeling, artificial intelligence and machine learning improve the safety of care for structural heart disease patients.

In February 2022, the company announced that it had raised $1.5 million in seed financing. It also has received a $150,000 commercialization grant from the Ohio Third Frontier Technology Validation and Start-up Fund.

Biotech engineer Lakshmi Dasi invented the technology for DASI Simulations and co-founded the company with Teri Sirset in 2019.

4M Building Solutions Buys Capital Services

Thu, 02 Feb 2023 12:00:00 Z

St. Louis-based 4M Building Solutions has acquired Capital Services Inc., a family-owned commercial cleaning company serving Columbus. Terms of the deal were not disclosed.

“This is an incredible opportunity for us to grow in Columbus,” said Tim M. Murch, 4M CEO and managing partner. “Capital Services built its business and reputation over four decades and is highly respected by area facility management professionals. Their deep roots in the community, and strong customer service practices, attracted us to the company. We look forward to a smooth transition for Capital’s teammates and customers and a tremendous boost to our presence in Ohio.”

Capital Services was founded by John Schell in 1981 and was owned by his daughters, President Christine Mitchell and Jennifer Dahman. The company’s customer base includes commercial office buildings, healthcare, and municipal facilities, and it has a niche in construction cleanup.

“I can speak for myself and my sister that running the business our father started has been a genuine honor,” Mitchell said. “This decision brings new opportunities for our employees and customers, and I am confident it will ultimately lead to a brighter future for all involved. 4M Building Solutions shares our values and commitment to excellence.”

Mitchell and Dahman will leave the business, while key management and employees continue their existing roles under the 4M name. 4M gains 40 new employees and cleaning contracts for 24 buildings. All operations will move to 4M’s existing Columbus office, 620 Taylor Station Road.

4M entered the Columbus market in 2014. It operates in 15 Midwest, Southeast, and Northeast states. It is known for its high customer service levels, people-focused culture, proprietary systems and processes, innovative solutions, and industry-leading safety standards.

The acquisition is 4M’s fourth over the past 12 months and the company’s eleventh over four years. It on the heels of 4M’s early January news that it had received a significant investment from Detroit-based private equity firm O2 Investment Partners.

“4M has shown more than 100% growth over the past five years," Murch said. "These early January steps are positioning us well to continue that momentum."

Onix Takes PE Growth Investment From Tailwind Capital

Fri, 15 Jul 2022 12:00:00 Z

Onix Networking Corp. has taken on a private equity growth investment from Tailwind Capital.

A Google Cloud Partner, Onix helps more than 1,400 customers leverage Google Cloud infrastructure and capabilities. The company is a 12-time Google Cloud Partner of the Year and a Google Cloud Managed Services Partner. Onix will use the PE firn's backing to increase its focus on building out advanced service offerings to complement its Workspace and Google Cloud Platform practices, including significantly scaling its technical consulting, application development, data and analytics and managed services businesses.

“We are excited to partner with the Tailwind team to invest behind new ways to serve our customers” Onix founder Tim Needles said in a statement. “We look forward to expanding our service offerings and continuing to invest in talent to support our customers at all stages of their cloud transformation journeys.”

Tailwind and Onix said they have aggressive growth plans, including scaling the company globally and pursuing acquisition targets to further strengthen the company’s service offerings and delivery capabilities.

DC Advisory served as financial advisor and McDonald Hopkins served as legal advisor to Onix. Lazard served as financial advisor and Davis Polk & Wardwell served as legal advisor to Tailwind Capital.

Eliza Jennings Closes Bond Deals

Wed, 13 Jul 2022 09:09:31 Z

Olmsted Township-based Eliza Jennings, a not-for-profit corporation that owns and operates three Ohio senior living campuses, has closed a $24.4 million bond financing.

The Series 2022A financing, managed by boutique Chicago investment bank Ziegler, consists of tax-exempt, fixed-rate bonds structured to achieve level debt service with a 20-year final maturity of May 15, 2042. The bonds were issued in conjunction with the Series 2022B Bonds, which were variable rate interest bonds directly placed with an unnamed Ohio bank.

The Series 2022A and Series 2022B Bonds were structured to achieve a pro-forma 50%-50% mix of fixed interest rate exposure to variable interest rate exposure upon closing. Eliza Jennings made a $7.5 million equity contribution to the financing to de-lever the organization. The contribution was structured to maintain 200 days cash on hand on a pro-forma basis post-closing.

The bonds grant a security interest in the gross revenue of Eiiza Jennings and a first mortgage lien on its campuses, according to Fitch. A fully-funded debt service reserve also provides additional security for the series 2022A bonds.

Concurrent with the offering, Eliza Jennings received its first public credit rating of BB+ from Fitch Ratings, which Ziegler said helped favorably price the bonds during volatile capital markets. The rating resulted in an average yield of 5.356% on the Series 2022A Bonds.

FormFire Acquired By Iowa's AgencyBloc

Tue, 12 Jul 2022 12:00:00 Z

Iowa-based AgencyBloc has acquired Cleveland-based FormFire, a provider of quoting and enrollment for small-group benefits and medical health questionnaire data collection for carrier underwriting.

FormFire's software platform supports benefits quoting and enrollment, streamlining the application process across many carriers and plan types into a single workflow across medically underwritten and community-rated small-group health plans. AgencyBloc is an agency management system provider for independent insurance agencies.

“We have seen the expertise that AgencyBloc brings to the table and it has been clear from the start that we are aligned in our shared mission to streamline operational processes for our broker and carrier customers,” said Colin Ingram, co-founder and CEO of FormFire. “We are very excited to move forward with the team and for all that we will accomplish together.”

A native of London, England, Ingram built a business consultancy that provided turnaround services as well as helped start more than 12 businesses ranging from consulting to tech groups

3STEP Sports buys Academy Volleyball Cleveland

Tue, 12 Jul 2022 12:00:00 Z

Wilmington, Mass.-based 3STEP Sports has acquired Academy Volleyball Cleveland (AVC), adding another nationally recognized club to its volleyball division.

AVC began in 2006 with five teams competing out of a high school gym. Over the years, the club has expanded to a program with 50 teams.

“We made the commitment and put in the work necessary to run a successful operation,” said AVC co-founder Paul Schiffer said in a statement. “Kids know that when they walk into our building they’ll be trained and given the chance to play against the best teams and athletes at the Open level. We’re proud that we’ve become Northeast Ohio’s premier volleyball club and we’re excited to grow the brand and join some of the most iconic clubs in the nation.”

“3STEP is synonymous with two things: professionalism and success,” AVC club director Meredith Rice said. “It’s our responsibility to provide our families with both of those things in whatever way we can. As we’ve reached the natural limits of what we can achieve in both of those areas on our own, it’s our great honor to partner with 3STEP to continue to advance the competitive experience for our athletes."

Continental Buys North Dakota Manufacturer

Mon, 11 Jul 2022 12:00:00 Z

Fairlawn-based Continental Corp. USA has acquired WCCO Belting, a North Dakota-based, family-owned belting manufacturer.

The company said the acquisition would complement its conveyor belting customer portfolio and strengthen its Conveying Solutions business in the agricultural industry. Additionally, equipment manufacturers, distributors, dealers and farmers will benefit from a combined product and service portfolio generating a full, multi-tier offering that will enable better support and service.

“This strategic acquisition is a threefold perfect fit: portfolio, sales market and people. Moreover, we continue our transformation towards a holistic solutions provider in one of the growing industries, namely the off-highway industry,” said Philip Nelles, a member of Continental’s executive board and head of the ContiTech Group Sector based in Fairlawn.

Terms were not disclosed.

Akron's Mindful Bought By Medallia

Mon, 11 Jul 2022 12:00:00 Z

Pleasanton, Calif.-based Medallia has agreed to acquire Akron-based callback automation provider Mindful from Alpine Investors.

Mindful, formerly known as VHT, will add to Medallia’s ability to turn customer signals into action, transforming the contact center experience and turning detractors into promoters. Medallia, a provider of customer and employee experience software, is backed by financial sponsors Thoma Bravo and Mubadala Investment Co.

“Consumers often want or need to talk to a live person, but no consumer ever wants to sit on hold,” Medallia CEO Leslie Stretch said in a statement. “Mindful combined with Medallia’s signals-to-action platform will enable organizations to deliver a modern customer experience while reducing the high cost and friction of the conventional contact center approach."

Mindful’s patented technology enables customers to schedule a call when convenient for them, automates intelligent callbacks that turn hold time into free time, seamlessly transitions customers to other channels when needed, and provides automated call initiation based on signals from various channels.

“We are delighted to be joining forces with the customer experience leader,” Mindful CEO Matt DiMaria said. “Our approach to customer interactions will be greatly enhanced through integration with Medallia’s award-winning Experience Cloud and category leading Text Analytics engine. Our joint customers know what a great customer journey should be and making their customers’ interactions easier and more productive is a home run.” 

Mindful was acquired by Alpine Investors through an LBO in 2018.

Oldcastle Closes Acqusisition of Barrette Outdoor Living

Mon, 11 Jul 2022 12:00:00 Z

Oldcastle APG has completed its $1.9 billion acquisition of Middleburg Heights-based Barrette Outdoor Living, a manufacturer of fencing, railing, outdoor accents and related products.

Atlanta-based Oldcastle, which is owned by CRH Company, also owns other manufacturers in the outdoor living and building materials space.

Founded in 1975, Barrette Outdoor Living operates 10 manufacturing facilities and four distribution sites across North America. The company previously sold a majority stake to Canadian PE firms TorQuest Partners and Caisse de dépôt et placement du Québec in November 2020 for an undisclosed amount.

“We are thrilled to join the Oldcastle APG family, whose commitment to delivering high-quality products to customers aligns with ours,” Barrette CEO Jean desAutels said in a statement. “I am extremely proud of what we have achieved thus far, and I believe Oldcastle APG will continue to grow our business from here.”

SelmanCo bought by Boston insurance broker

Wed, 06 Jul 2022 12:00:00 Z

Cleveland-based SelmanCo, an insurance broker and third-party administrator, has been acquired by Boston-based One80 Intermediaries, a specialty insurance broker for an undisclosed amount.

SelmanCo provides insurance services to more than 1.3 million customers, and serves over 800 financial institutions, 2,100 employers and 70 affinity groups. The company works with more than 55 insurance companies and maintains $300 million of annual insurance premium under administration. It

“We are pleased to join One80 Intermediaries as we are confident that our partnership will enable us to continue to grow in a nimble and efficient manner,” SelmanCo Managing Director David Selman said in a statement. "Further, the One80 platform will provide enhanced opportunities for our employees and expanded services to our clients and customers with the continued adherence to the values that have made us successful."

Dowling Hales acted as the exclusive financial advisor to SelmanCo and Jones Day provided legal representation for the transaction. One80 Intermediaries was represented by Ropes & Gray.

CookinGenie lands $2 million in seed capital

Wed, 29 Jun 2022 12:00:00 Z

Houston-based VC firm Allison Wood Ventures provided a $2 million seed investment in Hudson-based CookinGenie.

CookinGenie, co-founded by Sabah Drabu and Abhijit Ganguly, provides customers access to a network of personal chefs — or genies — for an event. Customers choose from a menu of available meals and schedule a date and time.

"We want to change how people think of personal chefs," Drabu said in a statement. "Most people think personal chefs are only for celebrities, but we wanted to create a marketplace where anyone can find and book a talented chef in their area in minutes."

"CookinGenie is a company dedicated to integrity and customer commitment, making it a fantastic fit for us," said Allison Wood, founder of Allison Wood Ventures. "CookinGenie's team identified a need, created a game-changing solution, and is currently customizing and scaling the business to ensure success. We are thrilled to invest in such a creative and forward-thinking startup, and we know the potential is limitless with this innovative team."

Quantic Electronics buys Corry Micronics

Wed, 03 Mar 2021 12:00:00 Z

Warrendale-based Quantic Electronics, an electronic component maker, has acquired Cranberry Township-based Corry Micronics, a leading supplier of RF and microwave components and subsystems specializing in high power and broadband solutions.

Since 1970, CMI has provided a broad range of RF and microwave components and subsystems. Its product portfolio includes RF/microwave filters, diplexers, multiplexers, low noise amplifiers, power amplifiers, RF switches, couplers, power dividers, waveguide components, and configurable RF switch matrices.

"CMI's broad portfolio of RF and microwave components perfectly complements our current RF portfolio, while at the same time deepens our customer relationships in key markets," Quantic President Kevin Perhamus said in a statement. "For decades, CMI has had success as a supplier and partner to major companies serving aerospace, defense, medical, and communications markets, and we look forward to helping them achieve their future growth objectives."

Quantic is a portfolio company of Arcline Investment Management.

RE2 Robotics Lands $19M In U.S. Funding

Tue, 02 Mar 2021 12:00:00 Z

RE2 Robotics, a developer of intelligent mobile robotic manipulation systems, has received $1.9 million from the U.S. Department of Energy Solar Energy Technologies Office to develop a robotic system for the outdoor autonomous manipulation of photovoltaic panels (O-AMPP).

Through the O-AMPP program, the developer of intelligent mobile robotic manipulation systems will apply its robotic technology to the solar construction industry.

“RE2 will utilize its extensive experience and technological foundation in autonomous manipulation to customize and integrate a robotic arm for this program,” Dr. Amanda Sgroi, principal research scientist at RE2 Robotics, said in a statement. “Our machine-learning and artificial intelligence modules, RE2 Detect and RE2 Intellect, will be applied to ensure that the system is capable of autonomously manipulating and placing PV modules to construct a solar field.”

Ron Leonhardt Buys Velvet Tango Room

Fri, 26 Feb 2021 12:00:00 Z

CrossCountry Mortgage CEO Ron Leonhardt Jr. has acquired the Velvet Tango Room, one of Cleveland's leading cocktail bars located between the city's Tremont and Ohio City neighborhoods, according to news reports.

The bar was at the forefront of the craft cocktail movement when it was founded in 1996 by Paulius Nasvytis at 2095 Columbus Road.

Terms of the sale were not disclosed, but cleveland.com reported that Cuyahoga County property records showed the 5,000 square-foot building housing the bar was sold to 2095 Columbus Road LLC for $400,000. The business had been listed for sale for $2.75 million in 2017, the website previously reported.

The acquisition is just the latest in the hospitality sector for Leonhardt. He also is an investor in three Slyman’s franchises, as well as Thirsty Dog East Bank and Dante’s Inferno in the Flats, according to a 2019 feature on him in Smart Business magazine.

MRI Software Buys MacMunnis

Thu, 06 Aug 2020 12:00:00 Z

Solon-based MRI Software has acquired Chicago-based MacMunnis Inc., a provider of lease administration solutions to businesses managing complex lease portfolios.

MacMunnis offers comprehensive cloud-based software for lease administration, as well as related managed services for payment processing, financial audits and lease abstraction.

"MacMunnis is a terrific addition to the MRI @Work offering, and we are excited to welcome their experience and expertise into the family," MRI CEO Patrick Ghilani said in a statement. "Our combined client groups will benefit from even deeper industry knowledge and a world-class services infrastructure that can help CRE leaders drive digital transformation and innovation in their organizations. Together, we look forward to helping real estate occupiers put technology at the heart of their businesses as they take on and overcome today's market challenges."

MacMunnis' services and software expand the MRI @Work suite, broadening and deepening MRI's ability to serve the end-to-end requirements of commercial real estate occupiers and helping them reduce the time to value from their software investments.

"Being part of MRI will lead to greater scale, development and penetration of our purpose-built solutions for real estate occupiers," said Brice Weeks, principal of MacMunnis. "This new platform will be of great benefit to our clients, helping them realize greater value from their current digital investment and adopt new innovations that support their strategic business goals."

FocusCFO Raises Angel Funding

Mon, 03 Aug 2020 12:00:00 Z

FocusCFO, a Columbus-based provider of CFO-level financial and management services for small and middle-market companies, recently raised $285,000 of convertible debt financing from undisclosed investors, PitchBook reported.

The company raised a similar amount of capital in 2019, according to PitchBook.