Jeff Helminski’s private equity firm has an internal goal of sourcing 20 qualified deals each week.
While those efforts slowed significantly during May, June and July as a result of the COVID-19 pandemic, Helminski — managing partner at Auxo Investment Partners — said his team is now at around 98 percent of that goal year-to-date, highlighting the recent surge in deal flow across a variety of industries that’s being seen nationally.
When looking at companies that are selling right now, Helminski lumps them into four categories.
The first is owners trying to exit manufacturing companies before the long-term effects of COVID become permanent within the business, dragging down the company’s appeal and value. Another segment of sellers are manufacturers that have seen a bump in sales because of COVID and are trying to capitalize on that short-term surge.A third group of sellers is looking to close on a deal before the end of the year out of concern of changes to the tax code under a potential Biden administration. The fourth category is simply the natural, ambient level of deals, including those that involve owners reaching retirement age. The fourth category of deals moved through the pandemic mostly unhindered, Helminski said.
M&A professionals expect the dealmaking market to remain healthy in 2019. That’s one of the conclusions from a panel of executives MiBiz assembled to talk about West Michigan’s mergers and acquisitions sector.
How has the M&A landscape held up in 2018 and what do you see going on in 2019?
Helminski: It's been really, really busy for us. We’re on track to see about 600 qualified deals (in 2018), if the last couple of weeks hold up about right...
Jun 11, 2017 — Private equity investments in Michigan grew in 2016 with an increase in both deals and the amount of capital invested. Part of the growth in private equity investments in Michigan and nationally stems from a greater awareness of private equity and an improving reputation for the industry. "At least in West Michigan, private equity has become more well-known in recent years," said Jeff Helminski, a managing partner at Auxo Investment Partners, which formed last fall.
The COVID-19 pandemic that dismantled daily routines and hammered the economy has forced investors to pivot along with the companies they back financially. As firms work through the pandemic and guide their portfolio companies, constant communication has taken on greater importance, particularly at a time when people are working with heightened anxiety about their safety and uncertainty about the future, said Jack Kolodny, a managing partner at Auxo. Auxo holds regular meetings with portfolio companies, which allows them to share information and best practices for employee safety, cleaning facilities, and ensuring “the messages are getting down to the operators so that everybody understands what’s going on with the company, with the world, and with the policies,” said Chris Merendino, a Vice President at Auxo.
In a competitive M&A environment, it is not enough for private equity firms to win deals just on capital alone. Potential buyers are increasingly seeking operating partners to work with the companies they acquire. Auxo Investment Partners, a lower middle market private equity firm out of Grand Rapids, Michigan, is one case in point. In 2017, Auxo acquired dry barge shipper M/G Transport Services and bought on industry veteran John Binion to serve as the target's operating partner. "Someone like John has enormous direct industry experience that none of us have," says Auxo co-founder Jeff Helminski.
Jan 8, 2017 — Professionals working in mergers and acquisitions in West Michigan expect strong deal flow to continue in 2017, maintaining a seller's market. The group brought together by MiBiz for an M&A roundtable discussion generally offered favorable views of President-elect Donald Trump’s pro-business policy agenda and doubted that rising interest rates would slow activity. ere are the highlights of what they had to say.