Life Time Fitness’ announcement last week that it will be acquired by private equity firms in a $4 billion deal is the biggest Minnesota transaction so far this year.
And CEO Bahram Akradi, Life Time’s founder and who will continue as the boss, has committed to a “rollover investment of $125 million in Life Time common stock,” about two-thirds of his worth in the company. Akradi is among the largest shareholders. He’s also cashing out a big stake that looks to be about $55 million.
Akradi, 53, a fitness buff who founded the company in 1992, owns 6.4 percent of the health and wellness enterprise, or about 2.5 million shares. The cash offer price for the deal was $72.10 per share. That means Akradi’s shares, including restricted stock that will vest at closing of the deal, are worth $180.25 million.
The $55.25 million is what’s left after the $125 million he’s investing in the transaction.
“Making the decision to roll in the bulk of my net worth [into] this thing was not a tough decision for me,” Akradi said in an interview on the day of the sale announcement.
Private equity ownership typically lasts several years. Akradi’s investment probably means he’s working for more than wages under the new ownership structure. He should get another return on his investment, presumably positive if everything works out, when private equity owners Leonard Green & Partners, TPG and LNK Partners exit their investment in the future through a sale to somebody else or even a public offering, as these things go.
Akradi is a hands-on CEO who enjoys finding solutions to business problems and has the entrepreneur’s bug in a big way.
“I’m more excited than ever. I don’t expect to slow down one bit,” Akradi said.
Patrick Kennedy and Neal St. Anthony
Pioneering Minnesota businesswomen honored
Dorothy Staugaard Dalquist, the woman behind the Bundt pans in countless kitchens, was also with her late husband, David, the founding force behind Nordic Ware.
The Dalquists started Nordic Ware in 1946 as a maker of ethnic kitchenware such as the Rosette Iron and Ebleskiver Pan. The St. Louis Park-based company really took off in the 1950s thanks to the Bundt pan, for which Dorothy Dalquist concocted recipes and reached a strategic partnership with Pillsbury Co. to mass-produce Bundt mixes.
One of the original Bundt molds resides in the Smithsonian Institution in Washington, D.C. And 500-employee Nordic Ware, on whose board Dalquist continues to serve, sells 350 products sold around the world.
Dalquist is one of eight Minnesota businesswomen who will be inducted into the Minnesota Business Owners Hall of Fame on April 9 at ceremonies at Cargill’s Minnetonka headquarters. Other inductees include:
• Maureen Steinwall, who bought Steinwell Inc., a custom thermoplastic injection molding company from her father in 1987 and built the Coon Rapids manufacturer from a $1-million-sales enterprise into a business of 150 employees and revenue of more than $20 million.
• The late Leeann Chin, who left China in 1956 and took in sewing and cooked from her home after she arrived in Minnesota. She started Leeann Chin’s restaurants in 1980, sold to General Mills in 1985 and bought it back in 1988, reaching 33 locations at one point.
• Kathleen Zurek, who in 1981 started Diversified Adjustment Service of Coon Rapids, the first female-owned and operated collection agency in Minnesota; it employs 110 in an industry dominated by male-owned firms.
It’s executive compensation season
Based on reports filed with shareholders of Minnesota public companies, the biggest 2014 paydays so far this proxy season went to CEOs Jim Cracchiolo of Ameriprise at $97.4 million, Doug Baker of Ecolab at $47.3 million and Scott Wine of Polaris Industries at $31.4 million.
Much of the compensation for each came from long-term equity awards. It helps that Ameriprise, Ecolab and Polaris stocks have hit all-time highs.
The soaring stock market of the past six years has been more of a boon to America’s executive suite than previously reported, a Reuters study revealed last week.
CEOs at large U.S. companies collectively realized at least $6 billion more in compensation than initially estimated in annual disclosures, thanks to the increased value of their stock awards over the period. About 300 CEOs who served throughout the 2009-13 period at S&P 500 companies together realized about $22 billion in compensation in the form of pay, bonuses and share and option grants, according to executive compensation analyst Equilar.
That compares with about $16 billion initially reported in annual company summary compensation tables, which include estimates for the value of stock grants based on the price of shares at the time of awards. The comparison does not include pensions and perks such as country club memberships.
Emerge recognized by Bank of America
Emerge, the nonprofit training agency that just opened an employment center with business and education partners in the restored North Branch Library building at W. Broadway and Emerson Avenue N., has been recognized as a “Neighborhood Builder” by the Bank of America Charitable Foundation.
The award includes a $200,000 grant and leadership training.
“This investment will empower [Emerge] to continue to help adults and youth access key services, specifically at their new [North Side] Career and Technology Center, leading them down a path to brighter futures,” said Larry Kloth, Twin Cities market president of Bank of America.
Cyber security addressed at St. Mary’s
Adm. James Stavridis, retired supreme allied commander of NATO, will address the ethics of cyber security at the annual Hendrickson Forum at St. Mary’s University of Minnesota’s university center on Park Avenue on April 9. Mary Brainerd, CEO of HealthPartners, will be honored for ethical leadership. Ticket information: www.smumn.edu/Hendricksonforum or 612-238-4545.