Grow Michigan, LLC Opens for Business

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MEDC

PLYMOUTH — Grow Michigan LLC, a collaboration of the Michigan banking community, Michigan Economic Development Corp. and the Michigan Strategic Fund, Monday announced the completion of its $30 million initial round of capitalization and commencement of investing operations.

Grow Michigan, with capital investment by Michigan banks and the Michigan Strategic Fund, provides top-tier strategic management advice and attractively priced risk capital in the form of subordinated and mezzanine debt to Michigan’s small businesses.

Grow Michigan mezzanine loans, made in conjunction with senior loans, will be in the $500,000 to $3 million range in the form of three to five-year subordinated debt, and carry a single digit coupon.

Subordinated debt, also known as mezzanine or junior debt, generally refers to debt that has a secondary or lesser claim to the issuer’s assets than more senior debt, should the borrower default on its obligations 

Also, in an effort to cut risk and enhance investment yield, mezzanine debt frequently has conditions that allow the debt to be converted into stock of the borrower, an option usually exercised if the borrower’s business becomes a major success.

In addition to the Michigan Strategic Fund, commercial and community banks that have invested in Grow Michigan’s initial close are Fifth Third Bank, PNC, Huntington, The Private Bank, Crestmark Bank, Seaway Community Bank, The Bank of Holland, The Bank of Northern Michigan, and Mercantile Bank.

Grow Michigan’s mission is to accelerate growth and capital investment in some of Michigan’s most promising small businesses. This will deliver job creation and improve the business climate in Michigan.

“Small businesses are job creation engines and our work to make cost-effective risk capital accessible to Michigan companies means real potential for immediate job growth,” said Michael A. Finney, MEDC president and CEO. “Grow Michigan demonstrates the genuine leadership, cooperation, co-investment and policy support that our commercial banking partners have provided throughout truly difficult times. They are stepping up to the plate and making a difference.”

Grow Michigan’s founding Members include Russell C. Youngdahl Jr., David L. Treadwell, Henry J. Brennan III and E. Mark Gregory III. Treadwell, Brennan and Youngdahl serve on the Grow Michigan Board of Managers with Treadwell serving as chairman, and Gregory chairs the Grow MI Investment Committee. Youngdahl also serves as CEO of Grow Michigan.

“The founding Members of Grow Michigan have been involved in working with, and addressing, the capital needs of small businesses in Michigan for decades,” Youngdahl said. “It is, simultaneously, the single greatest catalyst for sustainable economic and employment growth while being highly underserved by capital providers. We understand the opportunity to enhance the growth of jobs in Michigan and look forward to working with the MEDC and our investors to move Michigan forward. The leadership demonstrated by our investor bank members demonstrates their commitment to growing both their small business activities in the state and their support of Michigan, in general.”

The Grow Michigan Board of Managers also includes representation from the Michigan Strategic Fund and the Michigan banking community.

More information about Grow Michigan can be found at http://www.GrowMiCapital.com.

Youngdahl is also managing member and majority owner of NorthStar Capital LLC, a Jackson-based investment and management services firm that provides growth capital, capital markets access, strategic management and management advisory support to Midwestern companies involved in light manufacturing and distribution. Prior to this, he was president and a member of the board of Penske Financial Services LLC, a full service multi-national commercial finance company; president of Detroit Diesel Capital Corp., a captive finance affiliate of Detroit Diesel Corp.; and vice president of finance of Penske Transportation Inc. Earlier, Youngdahl served as vice president of finance and CFO for a publicly traded oil and gas exploration company, and worked with Ernst & Ernst. Youngdahl received a bachelor’s degree in 1975 from Alma College and served on its board of trustees for 12 years.

For 43 years Gregory served in senior capacities at Comerica Bank, including executive vice president and senior managing director. In these positions, Gregory worked with and underwrote many middle-market private companies of the type the fund is designed to
support. He has worked previously with Dow Chemical, W.R.Grace and IBM. Gregory received a bachelor of science degree from Michigan State University and an MBA from Wayne State University.

Treadwell’s specific experience with distressed companies and his success with turnarounds will be invaluable in the design and startup of the fund. Treadwell is chairman, president and CEO of EPMC Holdings Corp. (formerly EP Management Corp). He joined the company in July 2005 as President of its former Hillsdale Automotive division. Named CEO of EP anagement’s predecessor EaglePicher Corp. — a $600 million diversified holding company — Treadwell led EaglePicher through operating improvement and divestitures of its businesses EP Minerals, LLC, Wolverine Advanced Materials, LLC, EaglePicher Technologies, EaglePicher Medical Power, Hillsdale Automotive, EaglePicher Pharmaceutical and EP Boron.

As a partner and member of the coordinating committee at Howard & Howard, Brennan
concentrates his practice in mergers and acquisitions, corporate finance and general corporate law. He has represented both public and private companies in a wide variety of industries from automotive to emerging technology. Brennan has served on numerous for-profit and non-profit boards, and is a member of the Detroit Bar Association and its sections on Real Estate and Condemnation, Securities Law and Economic Development. He is also a member of the American Bar Association and its Antitrust Law and Business Law sections as well as the State Bar of Michigan and its Business Law, Probate and Trust and Real Property sections. Brennan received a bachelor of arts with honors, from the University of Michigan in 1979 and a J.D. from Wayne State University Law School in 1983. He was admitted to the State Bar of Michigan and  the U.S. District Court, Eastern District of Michigan, in 1983.

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