Paul Schmitt, the entrepreneur behind Rochester-based Envirolastech, a maker of products out of recycled materials, has hired a veteran chief financial officer to help raise equity.
Ron Liu, the new CFO, has worked in finance and operations at outfits such as Johnson Controls Government Systems and Northrop Grumman.
Envirolastech, a winner of the 2012 Minnesota Cup Cleantech Award, has developed composites that can be blended to customer specifications — the new wrinkle in recycled plastic. The technology was recognized by Polymer Solutions Independent Testing Lab for breakthrough innovation.
However, Envirolastech might have to announce its first plant will be built overseas later this year.
Envirolastech has debt-financing commitments from private and public partners, eager to cut landfill costs and create jobs from green building materials. But a frustrated Schmitt has raised less than $1 million of the $2.5 million in shareholder equity he hoped to raise this month on Crowdfunder.com. He needs it to complete a $13.5 million debt-equity financing for a commercial-scale plant in Rochester.
“I want to build this plant in Rochester, but we’ve got [financing offered] from Germany, Hong Kong, Malaysia and Denmark,” Schmitt said. “If we don’t get funding here, we’ll have to go overseas. This plant would mean 3,000 jobs over several years, including sorting plastics. This is Rochester, and most U.S. and most investors seem to want to invest in medical or cellular phones.”
Schmitt, a veteran contractor, started experimenting with recycled plastic years ago as an alternative to wood or concrete stalls for large animals. He’s spent more than a decade working with scientists, customers and manufacturers on prototype products. The company, which has support from the city of Rochester and the U.S. Department of Agriculture, develops blends of recycled resins from recycled plastic, glass and fly ash to create products it says are weather resistant and tough as traditional materials.
Private Equity Grows in Minnesota
Private equity firms invested $6.9 billion in 51 Minnesota companies in 2013, according to a survey by the Private Equity Growth Capital Council.
Minnesota ranked 17th in terms of the number of private equity investments last year, moving into the Big Twenty for the first time in the four-year-old study.
Nationwide, 3,300 private equity managers raise money from affluent individuals and institutional investors. The industry invested $443 billion in 2,300 companies last year.
The “Private Equity: Top States and Districts” analysis found that about $1.8 trillion worth of U.S. companies were sold in 2013, the highest annual total since 2007, the last year before the Great Recession. And private equity firms tend to buy and hold for three to seven years. They usually sell to larger, “strategic” buyers or take a company public.
Texas received the most private equity investment totaling $87.4 billion in 282 companies. California came in second, followed by Pennsylvania. Other states that moved up are Virginia, which jumped from sixteenth to seventh, and Maryland, Delaware and Minnesota. All moved into the top 20 in 2013. The biggest beneficiaries were the information technology and consumer industries.
Snap Fitness Does NASCAR
The Chanhassen-based franchiser of workout studios nationwide is attaching its name to one of America’s most popular sports.
Snap Fitness, a division of Lift Brands, is now the lead sponsor of NASCAR driver Landon Cassill and his No. 40 Chevrolet that he is driving in the Sprint Cup Series that began Saturday. Cassill, a 2008 NASCAR Nationwide Series Rookie of the Year, is also a triathlete. That makes Cassill and his car perfect endorsements for Snap and its 2,000 clubs. Cassill is training for an Ironman half triathlon on July 20 in Racine, Wis.
“We thought this was a great partnership between two brands that touch millions of people around the world,” said Peter Taunton, the founder of Snap Fitness and CEO of Lift Brands.