Detroit Free Press: Michigan private equity gains ranking

By JC Reindl

The $1.25-billion sale of Thomson Reuters’ health care division in Ann Arbor to a New York buyout firm was the largest private equity deal in Michigan last year, boosting the state to 12th place nationally for attracting private equity investment, according to a new report.

The report, released by the Private Equity Growth Capital Council, a trade association, found Michigan accounted for $9.6 billion of the country’s $347 billion in total private equity investment last year, just ahead of Massachusetts but two spots behind Ohio.

There are 41 private equity firms with Michigan headquarters and 443 private equity-backed companies with Michigan headquarters, according to the report, which used a new metric incompatible with earlier analysis.

Private equity investment can mean more dollars flowing into a state and more job creation. But it can also mean there are simply more targets here ripe for takeover, and possibly future sales of home-grown assets.

“What private equity brings to the table is management and industry expertise to help companies thrive,” said Noah Theran, spokesman for the council.

Private equity firms generally buy controlling stakes in companies in which they see unrealized potential for growth. The firms will often hold the companies for years — often three to seven — then “exit” through a sale or by taking the company public at a price that pleases their investors.

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