1. Smoke and Indie hospitals
mirrors? under pressure
PAGE 14 PAGE 22
OCTOBER 15, 2012 • VOL. 25/NO. 1 • $1.50 Serving Western Michigan Business Since 1988 www.mibiz.com
SPEED READ
Rack transplant
GRAND RAPIDS — A Chicago-based
manufacturer bought a building and
plans to open up shop in Grand Rapids
to be close to its customers. Page 8
Stock in the Market
GRAND RAPIDS — Downtown Grand
Rapids seems to have spilled a few
streets south, the result of confidence
inspired by the $30 million Downtown
Market. Page 12
Broader, younger audience
WEST MICHIGAN — Successful
nonprofits realize they must reach
out to younger donors – and on their
terms – if they want to be sustainable.
Page 15
Accelerated action
GRAND RAPIDS — Michigan
Accelerator Fund surpasses its fund-
raising goal and prepares for potential
exits. Page 16
Pine Rest makes a move
GRAND RAPIDS — Pine Rest plans
to consolidate some offices to a new
building Dwelling Place has planned at
its Herkimer Hotel project. Page 20
JUGGLING ACT
Neuro needs
GRAND RAPIDS — Spectrum Health’s
expansion of its neurosciences capa-
bilities aims to serve a growing number
of patients with neurological disorders.
Page 23
2012: An exceptional vintage?
WEST MICHIGAN — Oenophiles that Wolverine World Wide CEO Blake Krueger prepares to integrate
immediately pass on Michigan wines
in favor of more complex quaffs may one of the largest ever acquisitions in the footwear industry.
want to give the state’s 2012 vintages
another look. Page 24 SEE PAGE 4
STORY: JOE BOOMGAARD • PHOTO: JEFF HAGE
Plan for crisis
WEST MICHIGAN — The best way to
manage a crisis is to have a clear and
effective plan in place before one hap-
pens, experts say. Page 26
Fifth Third ahead of schedule in Michigan lending program
Tech firms vie for prize By Mark Sanchez | MiBiz otherwise may not have done, The bank to date has surpassed 80 percent of the $2.5
WEST MICHIGAN — Four firms from West msanchez@mibiz.com given the tight federal regu- billion commitment and is well ahead of expectations,
Michigan have been selected as finalists lations right now over com- Doyle said. Fifth Third is 30 percent of the way to another
in the $1 million Accelerate Michigan WEST MICHIGAN — When it came time for a mercial lending and collat- $2.5 billion commitment made in November 2011 for
Innovation Competition. Page 32 Standish-based plastic molding company to grow, the eral requirements, said Tim consumer and mortgage lending.
company went looking for a loan to finance an expan- Doyle, Fifth Third’s senior Huntington Bank, which committed $2 billion
ISSUE INDEX sion. But the firm didn’t qualify for a loan because of vice president and business over four years to small business lending through
a lack of adequate collateral, the result of the recession banking manager in West Pure Michigan Business Connect, said in June it had
Company Index 3
Design+Build 20
that pushed down the valuation of many companies. Michigan. originated more than $1.5 billion in loans to more
Economic Development 12 The solution for Vantage Plastics came via a “They would have been than 2,500 business.
Finance 16 Michigan Economic Development Corp. program harder transactions to get Doyle Doyle partly credits Fifth Third’s commercial loan
Focus: Logistics 28 that supports the collateral needs for businesses seek- done,” Doyle said. “We’ve volumes through Pure Michigan Business Connect to
Food Biz 24 ing credit, which enabled the company to secure a loan been somewhat handcuffed through regulatory the state’s improved economy, especially in the manu-
Health Biz 22 from Fifth Third Bank. The transaction is one of many channels.” facturing sector where companies are making capital
Manufacturing 8 Fifth Third has conducted as part of Pure Michigan Participation in the MEDC collateral program is purchases, acquisitions and facility expansions. Fifth
Nonprofit Organizations 15 Business Connect, an initiative by Gov. Rick Snyder one aspect of Fifth Third’s broader role and its $2.5 Third’s overall commercial lending in Michigan is
People & Datebook 33 and the MEDC to get Michigan businesses doing more billion, three-year commercial commitment made running about 30-percent higher in 2012 than in 2011,
Pay It Forward 6
business with each other. a year ago to Pure Michigan Business Connect. The he said.
Q&A and In the News 34
Small Business 26
Fifth Third to date has funded $40 million in amount was about 25 percent higher than what Fifth “It’s very positive,” Doyle said.
Talent Development 27 loans for 40 companies alone through the MEDC Third loaned to businesses in Michigan in the prior
Technology 32 collateral support program. They are deals the bank three years, Doyle said at the time. See PURE MI BUSINESS CONNECT | page 2
P E R I O D I C A L S
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new sunroof Battling Back
facility for MiBiz Supplement:
Holland Calhoun County
BATTLING
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2. 2 OCTOBER 15, 2012 • MiBiz Visit www.mibiz.com
Amway wants to exit wireless charging business
By Joe Boomgaard | MiBiz Now, the company said the technology is rap- chips or phones,” Weaver said. “Now seems like
jboomgaard@mibiz.com idly evolving to the point where it would better a good time to (sell the IP). The market seems to
to hand off the technology to a new suitor who be right.”
ADA — Amway parent company Alticor Inc. could expand its adoption and scope. If the sale happens, it would be the first time
looks to cut the cord on the intellectual property “It’s a good time to sell the IP and exit the in the company’s more than five decades in
behind eCoupled, the wireless charging technol- business, really to give the business the opportu- operation that it sold IP it developed, Weaver
ogy it developed and nurtured over a decade, by nity to expand with an owner in the business of said. That’s because it is mainly focused on its
finding a buyer to take it to the next level. consumer electronics or computer manufactur- core business and never has had “as big of a pat-
Alticor took the unusual step earlier this ing,” said Jim Weaver, vice president at Alticor. ent estate in a big, emerging market” as it does
month of announcing in a press release that it “They could bring the technology to life through with the eCoupled technology, he said.
planned to sell the wireless charging IP devel- their product lines.” But rather than find an investment banker
oped by its subsidiary, Fulton Innovation, an While Fulton Innovations developed more to quietly identify a buyer, make the transaction
internal skunk works division that works on than 240 worldwide patents and has another and then make the announcement, Amway is
product innovation. 480 patents pending behind the technology, the changing up that order. It led with the announce-
The company initially created the technology business of wireless charging was too far away ment that it wants to sell the technology, is in the
to power its eSpring line of UV water filters, but from Amway’s focus on health, wellness, beauty process of wrapping up a contract with an invest-
handed it over to Fulton Innovation to see where and direct selling, he said. To really advance the ment banker, and then plans to shop around the
Alticor plans to sell off the IP behind its eCoupled else the technology could be applied. That put the technology, the company felt it was time to find technology to suitors.
wireless charging technology, which it originally company into unfamiliar territory, consumer an outside buyer and exit the business. Sources in the investment banking indus-
developed for its eSpring UV water filter and later electronics, which could be fitted with adaptive “While licensing is something we under- try that spoke with MiBiz said the move seemed
explored as a solution for consumer electronics. devices that allowed for wireless charging. stand, we don’t have the ability to make power to indicate the company didn’t ascribe much
COURTESY PHOTO
value to the technology and wanted to walk
away from it.
Weaver insists that is not the case. He said
the company chose to go about the process in the
order it did out of fairness and transparency to
the employees that worked on the technology
and to the company’s licensing partners, some
of which could be interested in buying the IP.
“If we didn’t think it had any value, we
would have quietly exited the business,”
Weaver said. “We think differently. … This is
valuable IP to sell.
“We are not in any hurry to sell this. We want
to do it the right way. And I’ve been candidly sur-
prised how many people have expressed an inter-
est. We’ve got a good business now, but we think
it will be a great business in the right hands, and
we want to help it along the way.”
While Amway does want to get out of the
wireless charging business, it sees the eCoupled
IS THIS HOW YOUR technology as a “big success for the Amway busi-
ness.” The company plans to continue licensing
BANK SEES YOU? the technology to use in its water filters and
other products.
“We’re proud,” Weaver said. “There’s no
We don’t.
doubt that wireless power is in our future. To be
a pioneer in creating that market space is a suc-
We see you as an individual.
cess, not a failure.”
With the guts to run a business.
Which makes us curious how you do it.
And how we, as your bank, can help PURE MI BUSINESS CONNECT
Continued from page 1
you do it better. What makes your
business special? What is its true potential? The partnership with the state has exceeded
How do you actually get paid? It’s how expectations for the Cincinnati-based Fifth
we can generate ideas that work for you. Third, which is working to expand the model to
Like integrated payables and receivables
other states such as Ohio, Illinois and Florida.
“The momentum we’ve made in Michigan
solutions that may help you improve cash
— others states are seeking to leverage that,”
flow. Or, perhaps, financing options you Doyle said. “We’re taking this model on the
never knew existed. We don’t think a road.”
bank can do that without being curious. Key to the model is the MEDC’s referral of
companies seeking assistance for an expansion
Learn more at 53.com/BusinessIdeas or securing the capital or credit they need to
grow.
We’re Fifth Third Bank. Doyle recently detailed the program at a
U.S. Department of Treasury conference in
Chicago on sharing best practices to improve
access to credit for businesses across the
nation. His primary message in his presenta-
The curious bank.
tion was for both the public and private sectors
was to “put down silos” and to look at how they
can work together.
Banks need to get more innovative as well in
how they approach the market, Doyle said. Given
the depth of Michigan’s economic troubles, the
Pure Michigan Business Connect program and
partnership with the state was an opportunity
that Fifth Third welcomed.
Deposit and credit products provided through Fifth Third Bank. Member FDIC. Equal Housing Lender. Lending is subject to credit review and approval. “This is the best situation for Michigan, if
© Fifth Third Bank 2012. we’re working together,” Doyle said. “Banks have
to change. What we realized in the last four years
is we have to be more innovative because the cus-
tomers’ needs are changing as well.”

3. Visit www.mibiz.com MiBiz • OCTOBER 15, 2012 3
WHAT’S INSIDE October 15, 2012
Published since 1988
MiBiz® is a registered trademark
of REVUE Holding Co., Inc.
Editor & Publisher
Brian Edwards
bedwards@mibiz.com
Managing Editor
Joe Boomgaard
jboomgaard@mibiz.com
Senior Writers
Mark Sanchez (finance, health care)
msanchez@mibiz.com
Mike Brennan (technology)
mbrennan@mibiz.com
Staff Writer
Elijah Brumback (design-build, real estate)
ebrumback@mibiz.com
12 24 Contributing Reporters
Carl Dunker, Kelly Hill, Lindsay Patton-
Carson, Ruth Terry
Minion
Stephanie Allen
MANUFACTURING FOOD BIZ Contributing Photographer
7 Out-of-state rack maker plans new Grand Rapids plant 24 West Michigan wineries excited for 2012 vintage Jeff Hage
10 Magna International to expand in Holland Columnists
11 MCC launches hybrid CAD/CNC program SMALL BUSINESS Melissa Anderson, Karl Dehn,
Ron Kitchens, Birgit Klohs, Randy Thelen
11 Event to highlight center’s training capabilities 26 Planning, communication key to crisis management
Vice President of Sales
Denise Schott
ECONOMIC DEVELOPMENT TALENT DEVELOPMENT dschott@mibiz.com
12 Downtown GR project gives developers confidence to invest 27 Summit shares best practices in employee retention
Senior Advertising Consultant
14 Smoking gun? Study shows little impact from smoking ban Shelly Keel
FOCUS: LOGISTICS skeel@mibiz.com
NONPROFIT ORGANIZATIONS 28 State looks to bolster logistics capabilities Creative Services Director
15 Nonprofits broaden reach to younger donors 30-31 Statistics Kristi Kortman
kkortman@mibiz.com
15 Q+A: Cecilia Cunningham, Major Gifts Director, Aquinas College 31 Governor, biz leaders near unanimous in bridge support
Ad Designer & Traffic Coordinator
Kellie Zaplitny
FINANCE TECHNOLOGY kzaplitny@mibiz.com
16 Accelerated Action: VC fund beats fundraising goal 32 Four West Mich. firms vie for Accelerate Michigan prize
Web Editor
16 PNC survey shows small business owners planned for sluggish year Jayson Bussa
NOTABLE jbussa@mibiz.com
DESIGN+BUILD 6 Pay It Forward: Pete Brand Circulation
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4. 4 OCTOBER 15, 2012 • MiBiz Visit www.mibiz.com
JUGGLING ACT
Wolverine World Wide CEO Blake Krueger prepares to integrate
one of the largest ever acquisitions in the footwear industry.
By Joe Boomgaard | MiBiz
jboomgaard@mibiz.com
ROCKFORD — Two decades of merger experi-
ence have prepared Wolverine World Wide Inc.
for the biggest acquisition in the company’s his-
tory and one of the largest and most complex
deals ever in the footwear industry.
The Rockford, Mich.-based footwear com-
pany’s role in the $2.0 billion acquisition of
Collective Brands Inc. should yield consider-
able growth for the company that makes Hush
Puppies and Merrell shoes. Company executives
proudly claim the transaction, which was final-
ized last Tuesday, makes Wolverine the third-
largest footwear company in the world, trailing
only Nike Inc. and Adidas AG. The acquisition
is expected to add $1 billion in annual sales to
Wolverine’s top line in 2013, pushing its total
revenues to more than $2.5 billion.
But some on Wall Street and in the footwear
industry are wondering if Wolverine will be able
to pull off an acquisition this large. The deal will
create a new level of complexity as Wolverine
works to simultaneously integrate the acquired
operations of Collective Brand’s Performance
+ Lifestyle Group (PLG) and its four brands:
Sperry Top-Sider, Saucony, Stride Rite and Keds.
And for the first time in memory, Wolverine will
find itself heavily leveraged with the mountain
of debt required to pull off the “transforma-
tional” transaction that will vault it to the upper
echelon of global shoe companies. Wolverine World Wide CEO Blake Krueger and the company’s management team are focused on integrating the company’s largest ever acquisition and one of the
“We’re a pretty conservative Midwest com- largest deals in the history of the footwear industry. “The dovetail strategic fit for us is almost perfect,” Krueger said of the deal that adds four brands to Wolverine’s
pany,” Wolverine CEO Blake Krueger told MiBiz. portfolio and more than $1 billion in annual sales. The acquisition positions Wolverine — with projected 2013 total revenues of more than $2.5 billion — as the third-
“For years, we’ve operated with basically no debt largest global footwear company behind only Nike and Adidas. PHOTO: JEFF HAGE
and a pretty large cash surplus, but this was obvi-
ously such a strategic opportunity for us. So we
made the decision to make a break from our past “The fact that Collective Brands went for so distribution and entry into new market seg- come from markets outside the United States.
mode of operating.” much money — and that Wolverine had to take ments such as kid’s and athletic footwear. The The Sperry brand, for example, is one of the
That break has given pause to some on Wall on debt to complete the deal — shook up the PLG brands, which are sold primarily in the most popular casual shoe brands domestically
Street. industry,” she said. United States, should see tremendous benefit with an estimated $330 million in annual rev-
“Without a doubt you have integrated smaller from Wolverine’s international sourcing and enues, but only 4 percent of its sales come from
brands successfully in your portfolio,” said ana- distribution networks, as well as its disciplined outside of North America.
lyst Diana Katz from Lazard Capital Markets FILLING WHITE SPACE approach to financial management. By comparison, Wolverine marketed nearly
on a conference call with the company, but she While there are questions, few argue with the “The dovetail strategic fit for us is almost two-thirds of its units in international markets
and others asked how Wolverine would be able strategy behind the deal, which saw Wolverine perfect,” Krueger said. “They’re brands we know last year, and international revenues accounted
to handle the integration of such a large acqui- partner with two private-equity firms on the intimately, formerly as some direct or indirect for more than 40 percent of total revenue.
sition. In fact, many analysts are taking a “wait complex bid. competitors of ours. We know that we can help “Our international scope is still really one of
and see” attitude about this deal, said Michelle From a strategic standpoint, the PLG them accelerate their current growth path.” the envies of the industry,” Krueger said. “After
Tay, business editor of industry trade publica- acquisition gives Wolverine added size and The first acceleration pedal is international. 50 or 60 years, operating with different cul-
tion Footwear News. negotiating power, as well as expanded retail Less than 10 percent of PLG’s footwear sales tures, promoting and growing brands on a global
basis — it’s kind of in our DNA now.
“So we know we can take these (new) brands
international and give them some pretty imme-
Stiles is taking care of business. diate global mass and global extension.”
There’s also tremendous upside for improv-
ing PLG’s profit margins, which are about
40 percent lower than what Wolverine earns,
Krueger said.
“We can win just by improving their profit-
ability up to our levels,” Krueger said. “We’re
pretty good operators as a company and consis-
tently deliver healthy profit margins. We can
bring them up to our profitability level over
We helped Energetx innovate with breakthrough technology. time.”
Energetx Composites has successfully translated its deep manufacturing expertise to capitalize on opportunities in the growing KMT RoboTrim
Wolverine should also see benefits. With the
wind-energy industry. To procure the specialized equipment needed, they turned to Stiles. Key among the Holland, Michigan- addition of the four PLG brands into its portfo-
based company’s acquisitions was a highly advanced, fully automated, KMT root end cut and drill system for processing the lio, the combined company expects to sell 100
150-foot-long, 9-ton blades used by utility-scale wind turbines. The system uses breakthrough drilling technology that’s 25%
million pairs of shoes and units of apparel per
faster than other systems and offers patent-pending automatic blade-location technology—drastically reducing set-up time and
maximizing productivity for this growing enterprise. year around the globe — up from the 52 million
units Wolverine sold in 2011. The company’s
Find out how Stiles can help you take care of your business. Call Stephan Waltman at 616.698.7500 collective mass will allow it to get better pricing
or email swaltman@stilesmachinery.com. stilesmachinery.com from its suppliers, and its increased volume will
help spread out logistics costs, Krueger said.

5. Visit www.mibiz.com MiBiz • OCTOBER 15, 2012 5
“It immediately makes you important to Opportunity Fund LP and Blum Capital
“At 100 million pairs a year,
everyone, and by everyone, I mean the factories Partners LP, jointly acquired the remaining por-
that make footwear around the world,” he said. tions of Collective Brands, Payless ShoeSource
“At 100 million pairs a year, we carry a very large and Collective Licensing International.
collective pencil.”
The acquisitions also fill “white space”
“We were able to end up with the brands
we wanted and not touch the Payless business, we carry a very large
collective pencil.”
in Wolverine’s portfolio, giving it entry into which is an entirely different kind of lower-mar-
markets where it lacked a significant presence ket business,” Krueger said.
— children’s, athletic and women’s footwear, The transaction required Wolverine to take
in particular — and a significantly larger foot- on approximately $1.3 billion in long-term debt,
print of company-owned retail stores. Krueger which was raised through a bank syndicate, and BLAKE KREUGER, WOLVERINE WORLD WIDE
expects Wolverine’s existing brands to benefit an offering of corporate notes. The company
by gaining immediate entry into the “better- secured a $1.1 billion credit agreement with a
grade” domestic children’s footwear market syndicate of 20 banks, including JP Morgan
through Stride Rite’s 300 retail stores. Chase, Wells Fargo Bank, Fifth Third Bank and
That’s a market where Wolverine had “pock- PNC Bank. The company also offered $375 mil- ramped up its pace, licensing Patagonia and from 2005 to 2011. Having Jeppesen on board
ets of success” but never really had the infra- lion in senior notes, which will be used to fund acquiring Sebago, Chaco and Cushe. helped in the acquisition because he ran PLG’s
structure to make a significant play, Krueger the purchase and pay off PLG’s debts. Every one of them has been successful, operations and sourcing and was familiar with
said. The notes offering was oversubscribed, said Krueger claims. its brand leaders.
“It’s a different business,” he said. “(The Krueger, attributing the demand to a strong “We tend to be a pretty disciplined team “We’ve been trying to lasso him for years and
stores) will also give our existing brands’ chil- national market for corporate debt as well as the when it comes to acquisitions and brands. were fortunate to do that six months or so before
dren’s business access to factories (and) product company’s track record as an operator. When you look at our history with Sebago, with the acquisition was announced,” Krueger said,
development expertise that we frankly didn’t “I think the strategic fit, the strategic story, Caterpillar, with Harley-Davidson and with cracking a smile. “He’s made huge contributions
have in sufficient depth before.” our reputation for being pretty consistent and many of our other acquisitions, every one of already to our company.”
PLG’s retail stores will effectively double good operators of the business sold very well,” those has been a success story. Frankly, (that) is
Wolverine’s retail sales as a percentage of rev- Krueger said. “We had a very high confidence unusual to have a period of sustained successes
enue from 7 percent to 14 percent from brick and level.” over a period of years.” OFF THE DEAL PATH
mortar stores and e-commerce websites, it said The poster child of that successful acquisi- The final driver of the company’s integration
in a filing with regulators. Following the acqui- tion strategy is Merrell. The company acquired strategy is focus. While the company has built
sition, Wolverine will operate about 425 stores, PROVEN TRACK RECORD Merrell from the Outdoor Division of Sports its business through a series of acquisitions and
mostly in the United States. Based on Wolverine’s track record of acquiring Holding Corp. for $17 million in cash in 1997. brand licensing agreements, it knows it will
“In today’s world, we believe you need to con- and integrating brands and operations over the The prior year, Merrell had sales of approxi- have to step back from the hunt for other deals
trol a certain percentage of your destiny at your past 18 years, the confidence may be well placed. mately $27 million. Today, “Merrell’s well over and pour all its effort into integrating the PLG
own retail,” Krueger said. “It brings you closer Founded in 1883, Wolverine operated with just $500 million in sales,” Krueger said. business.
to the consumer. It lets you present your brands three main brands — Wolverine, Hush Puppies “When we acquired Merrell, it wasn’t a very Because the companies shared a similar
in the best possible way and actually creates a and Bates — for most of its existence. Beginning big brand, and it wasn’t a very good business,” he culture and because the acquisition process
healthier wholesale business.” in the early 1990s, though, Wolverine began to said. “When we were able to plug and play that has gone on for so long, Wolverine’s execu-
license and acquire other brands, starting with a into our international distribution network, we tives estimate the PLG business will be fully
license with Caterpillar Inc. for CAT Footwear were able to get some fairly accelerated growth.” integrated into Wolverine by the end of the
COMPLEX DEAL, EASY DEBT in 1994 and, later, the acquisition of the Merrell calendar year.
Wolverine has already cleared a significant brand in 1997. A year later, Wolverine acquired “There are certainly some projects and some
hurdle with the transaction: getting it done. the global license for the Harley-Davidson foot- THE PARTS OF THEIR SUM information services that will roll on into 2013,
The company announced the acquisition had wear brand. Beginning in 2003, the company Wolverine’s management plans to use the same but in a lot of areas, the integration will be sub-
cleared last week, two months later than origi- playbook for integrating the PLG brands. stantially complete this year,” Krueger said.
nally anticipated and more than a year after While the size does far eclipse any other deal With the company taking on significant
Collective Brands first put itself up for sale. in Wolverine’s history, the integration process financial burden, Wolverine will be out of the
“It was about the longest process I’ve heard
of in recorded M&A history,” Krueger said with
Brand (new) revenues will be based around the parts rather than their
sum. The four individual brands that make up
acquisition market for about two or three years
as it pays down its debt.
a laugh. The four brands acquired by Wolverine the acquisition are of a size that Wolverine is “This acquisition and our existing business
Collective Brands first put itself on the mar- World Wide will add more than $1 billion used to digesting, he said. are going to generate a lot of cash. Obviously,
ket in August 2011, after shopping itself quietly in revenue to the Rockford-based footwear “Although this is a big business … you have we’re going to first use that cash to invest back in
for a few months. Wolverine had reportedly been maker’s results in 2013. In 2011, the four to also remember it’s comprised of four differ- our brands, but then we’re going to take the cash
eyeing the footwear brands “for a long time,” recently acquired brands topped the billion ent brands. These are all brands of a size we cur- that’s generated and pay down the debt,” Krueger
according to an industry source, but was not dollar revenue mark. rently have,” Krueger told analysts in a confer- said. “But we’ll always be out there looking for
interested in the Payless ShoeSource retail busi- ence call. niche brands, maybe a smaller bolt-on acquisi-
ness. The company and its advisers recruited The CEO argued that Wolverine does have tion. After a couple of years, we’ll certainly be in
two private equity firms with retail portfolios experience integrating brands the size of the a position to consider a larger acquisition.”
to make the deal happen. The group decided to Sperry Top-Sider: $330 million individual PLG brands, which in 2011 ranged in Krueger does admit that there is one thing
bid for CBI together and divide the respective revenues from $80 million (Keds) to $335 mil- that keeps him up at night related to the massive
businesses. While it sounds simple, the three- lion (Stride Rite). He said the company can suc- acquisition.
party“club bid” aspect of the transaction added a cessfully integrate the PLG business by using “The thing that really keeps me up is try-
layer of complexity, said attorney Tracy Larsen Saucony: $270 million the company’s usual formula: “time, people and ing to prioritize all the opportunities in front
of Barnes & Thornburg LLP, which represented effort.” of the company right now,” he said. “When you
Wolverine. Negotiating terms among the three “There is always risk,” Krueger told analysts. look across our existing portfolio of 12 brands,
parties and Collective Brands, and the subse- “It probably always takes more time and effort the global opportunities for these four (newly
Stride Rite: $335 million
quent need to obtain audited financials on the than you think going into it, but we are pretty acquired) brands, the fact that our company has
pieces of the Collective Brands business created good at execution.” become a one-stop shop for international dis-
the bulk of delays, he said. Wolverine also had an insider’s perspective tributors and retailers, the collective power of
In the final transaction structure, Wolverine on the PLG business. About six months before these 16 brands…(is) almost unlimited.
Keds: $80 million
acquired the PLG brands and business for the acquisition was announced, Wolverine hired “For me, right now, and the management
about $1.24 billion, while two San Francisco- SOURCE: WOLVERINE WORLDWIDE ANALYST PRESENTATION Mike Jeppesen, who served as Collective Brands’ team, it’s really a question of prioritizing our
based investment firms, Golden Gate Capital senior vice president of design and sourcing efforts, time and resources.”
H
HISTORY OF WOLVERINE WORLD WIDE BRANDS Saucony
Sperry Top-Sider
Patagonia Stride Rite
Hush Puppies HyTest Cat (Canada) Keds
Wolverine Hush Puppies Harley- Merrell Track ‘N Trail Wolverine Chaco Colombia JV
Bates Cat (U.K.) Merrell Davidson (Europe) Cat (Europe) Sebago (Canada) Cushe India JV
1883 1994 1996 1997 1998 2001 2002 2003 2005 2009 2012

6. 6 OCTOBER 15, 2012 • MiBiz Visit www.mibiz.com
UNDERWRITTEN BY:
FORWARD Highlighting local business people giving back to the community.
To nominate someone for a Pay It Forward feature, email editor@mibiz.com.
PAY IT
Pete Brand
After completing an assignment in sixth grade that had him rifling through the help wanted ads in hospitality services to families in crisis,
the local newspaper to find the job of his dreams, Pete Brand knew he wanted to be an entrepreneur. Brand is committed to empowering people
As the co-founder of Mindscape at Hanon McKendry, he is constantly engaging businesspeople so they can get their lives on track.
with startup ideas. Using his expertise to help others launch their own businesses, Brand goes one “It’s really easy to watch the guy get out
Co-founder, Mindscape step further, putting confidence behind each person he works with in and out of the office. of his BMW wearing a slick suit and think
A
that’s what success looks like,” he said.
at Hanon McKendry fter co-founding Mindscape in
2001, Brand has overseen his
With those days in the rear view, Brand
is using his experience to help others
To Brand that’s not the kind of inspira-
tion people need. Instead people need to
company’s growth year after year. bounce back. look inward and promote their strengths.
But the momentum he is working with “What drives me is helping people real- “If I can help people realize happiness
now wasn’t always behind him. Like many ize they are significant,” he said. “Whether and not sell out and spend all of their
people, Brand battled his share of personal you’re homeless or a multi-billionaire, time and effort doing something they
issues, including the not-so-distant people’s biggest fear is not mattering.” hate just to pay the bills, that’s my goal,”
passing of a loved one and the financial Through his work mentoring entrepre- he said.
insecurity of being an entrepreneur with neurs or his efforts on the board of Family
a dream. Promise, an organization that provides Interview and photo: ELIJAH BRUMBACK

7. Visit www.mibiz.com MiBiz • OCTOBER 15, 2012 7

8. 8 OCTOBER 15, 2012 • MiBiz Visit www.mibiz.com
Manufacturing
Out-of-state rack maker plans new Grand Rapids plant
By Carl Dunker | MiBiz million, has around 175 employees nationwide.
cdunker@mibiz.com Originally a manufacturer of racks for use
in electroplating, the product line at Associated
GRAND RAPIDS — A Chicago-based manu- Rack Corp. expanded in recent years to include
facturer plans to open up shop in Grand Rapids fixtures for powder coating as well as protective
to be close to a key customer, while riding the coatings, material handling products and heat-
wave of the automotive recovery and a successful treating units.
diversification strategy into growth industries. Currently owned by Bill Faulman, a descen-
Associated Rack Corp. just purchased a dent of its founder, the company also diversified
more than 10,000-square-foot facility on Kraft its offerings to attract business from burgeon-
Avenue in Grand Rapids, where the company ing industries, namely the aerospace sector,
plans to open a new plant to make racks, which Bauer said. That’s led to successful bids on con- Associated Rack Corp. just purchased a facility in Grand Rapids to open a new manufacturing operation. The
its customers use in processes ranging from tracts from companies including aerospace $11 million company makes racks used in powder coat paint lines and other manufacturing processes. The
powder coating to electroplating. giant Boeing, he said. site joins the company’s other facilities in Illinois and Florida, but will service local customers. COURTESY PHOTO
The move into West Michigan follows This diversification strategy is partly to
an increase in business at many of the firm’s thank for the company’s survival of the reces- trade school, but are developed over time through “Think about an artist or a sculptor, some-
local customers, including automotive sup- sion, Bauer said, and helped make possible its on-the-job experience. He said he needs more can- one who can look at a block of marble and see
plier Lacks Enterprises Inc., said Don Bauer, move into Michigan. didates that think like people who grew up around what’s inside of it,” Bauer said. “You have your
Associated Rack’s engineering manager. “We try to diversify what we can do in order farms and have a natural ability to find solutions prototype guy and you tell him you need certain
The company has initial plans to hire up to to provide more services to our customers,” to products and can develop new products and pieces held a certain way, and he has to be able
20 people at the site, he said. said Bauer. “Business was really kind of a roller prototypes that make business easier. to see how to make it work, and then form and
“Things are much better this year than in the coaster in the past six years, especially in the “It’s a skill level that you can’t just go to shape the metal.”
past four,” Bauer said. “We decided six or eight lows. We really were kind of just holding on and a community college and get someone who While Associated Rack also expects its
months ago that there was enough business for avoiding layoffs.” has two years of class experience,” said Bauer. employees to have hard skills and advanced
us to move into the Grand Rapids area.” As the company enters the West Michigan busi- “Oftentimes, those are skills that you find in training in welding and fabrication, the most
The real estate transaction was brokered by ness environment, Bauer sees staffing as the larg- someone like a farmer, because farmers are important quality that the company is looking
Pamela Collins, a Grand Rapids-based broker at est obstacle to the expansion plans. He said finding always having to find ways to make things work. for in its people is that ability to see the finished
Callander Commercial. qualified candidates to fill positions is becoming We actually have a few guys who have that back- rack, how it will be used and the steps needed to
The new Grand Rapids location will be increasingly difficult, for a variety of factors. ground, who worked on a farm when they were make it, he said.
the company’s eighth, and it’s first location “Some of the workforce needs that we have younger.” Bauer knows that takes time, noting that
in Michigan — at least in a handful of years, are for welders, especially experienced ones,” Because the company is often manufacturing the company will work with the right person to
said Bauer, who noted the company’s founders said Bauer. “I’m not talking about somebody racks that are custom-built to hold a specific part develop those traits.
started the company in the state 60 years ago. who can weld a pipe or a seam, I’m talking about and fit into a defined manufacturing process, “We’re looking for people who have the abil-
Currently, Associated Rack has locations serv- doing intricate, precision TIG (tungsten inert Associated Rack especially values employees ity to think carefully through a problem and
ing the southern states and the western U.S., gas) welding.” who can envision the entire manufacturing pro- form and bend metal by hand,” Bauer said. “You
with two plants each in Florida and Illinois. Bauer said these skills are not the type that cess that goes into a part and then design a rack have to find someone who has the experience and
The company, with annual revenues nearing $11 can be easily picked up at a community college or to fit that whole production cycle, Bauer said. incubate that.”
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9. Visit www.mibiz.com MiBiz • OCTOBER 15, 2012 9