Minnesota attracts big private equity investment bucks

Private equity investment in Minnesota companies soared in 2015, with $12.9 billion invested in 83 firms, up from $7.2 billion in 2014, according to recently published research from the American Investment Council.

In its "Private Equity: Top States and Districts in 2015" report, the Washington, D.C.-based advocacy group said that private equity firms nationally invested $626 billion in more than 3,700 companies. That was a 1.3 percent increase in funding compared with 2014. There are 14,214 companies in the U.S. that are actively backed by private equity firms.

Minnesota ranked 15th in capital invested, ahead of neighboring Wisconsin, which was ranked 18th, attracting $11.6 billion to seven companies. Iowa, North Dakota and South Dakota combined attracted $4.4 billion in private equity for 35 companies.

The No. 1 state for private equity investment in 2015 was Illinois, which attracted $94.6 billion to 193 companies. California was second, spreading $86.73 billion across 488 companies.

Life Time Fitness headed the list of Minnesota companies, with its $4 billion go-private transaction announced in March 2015 and funded by Leonard Green & Partners, TPG Capital and LNK Partners.

Digital River's $840 million acquisition by the private equity firm Siris Capital Group in February 2015 was the second-largest private equity deal of the year. A $700 million investment in the Eden Prairie software firm HelpSystems was the third-largest Minnesota deal in 2015.

Minnesota's Third Congressional District ranked ninth nationally among congressional district in companies funded and 12th in capital invested in 2015. Rep. Erik Paulsen's district, which includes Eden Prairie's so-called "Silicon Prairie" cluster of technology firms, was home to 32 companies that attracted $7.97 billion.

Minneapolis-based Tactile Systems Technology is close to pricing an initial public offering that could raise $60 million for the provider of lymphedema treatment and venous ulcer therapies, according to IPO research firm Renaissance Capital.

Also known as Tactile Medical, the company filed an initial registration statement with the Securities and Exchange Commission this year. This month, it amended the filing to say that it plans to offer 4 million shares at a proposed offering price of $14 to $16 per share.

Once its offering is completed Tactile will trade on Nasdaq under the symbol "TCMD."

Any new offering would help thaw the freeze in IPOs nationally and locally. So far this year 38 U.S. companies have completed IPOs. That is down 58 percent from the same period the year before.

Tactile Medical would be the first Minnesota-based company to complete an IPO since Entellus Medical on Jan. 29, 2015.

It has consistently been named by employees to the Star Tribune's annual Top Workplaces list.

Patrick Kennedy

Iric Nathanson, a most youthful 76, is retiring from the Minneapolis Consortium of Community Developers (MCCD) after 13 years of working with fledgling businesses to raise capital, patch the roof and, often, expand.

Before that, Nathanson worked 20 years in small-business development at the Minneapolis economic development agency.

Nathanson, a North Side native, also is a Minneapolis historian who has written many articles and a book or two about the economic-political development of the city. His insights over the years remind us that we stumble forward and things are never as bad as they seem at the moment.

Nathanson was named to the Twin Cities Community Development Hall of Fame for a half-century of work in 2014.

In recent years, Nathanson helped finance the expanded Butter Bakery Cafe on a once-vacant corner of the south side that now boasts an apartment building and businesses that employ 50-plus people. He assisted residential contractor Anderson Mitchell in north Minneapolis with expansion-capital loans, and secured financing for Aggressive Hydraulics of East Bethel, enabling it to build a new manufacturing plant.

Nathanson also is a good writer on myriad subjects, including a 2015 column in MinnPost about the 1964 Rolling Stones concert in Excelsior. Some of the 300 patrons at "Danceland" booed. They didn't think the fledgling Stones were worth the $6 admission.