Big Wheels and Big Deals: The region’s power plays of 2021

In a year of major moves, these pillars of business in the Kansas City area orchestrated some of the most profound change.

David Feinberg and Cerner

Well, that didn’t take long: A scant 80 days passed between David Feinberg’s official start as Cerner Corp.’s CEO and the Dec. 20 announcement that Texas-based Oracle was buying the region’s largest private employer. The reported sales price: $28.3 billion.

It was a very big deal, but even at that price, the sale was just the second-largest in the region in 2021, several billion lower than Canadian Pacific Railways’ acquisition of Kansas City Southern (see Executive of the Year, Page 14).

For years, speculation has abounded where its growth would take Cerner, the all-time leader on Ingram’s annual list of the region’s 100 fastest-growing companies. Much of that talk was grounded in the success that made it an entrepreneurial gem for this area, going from startup in 1979 to a global health-care IT systems company, going public, and becoming a very attractive takeover candidate. That speculation increased after the death of co-founder Neal Patterson in 2017, which ushered in Brent Shafer as the company’s first CEO from outside the founding leadership trio. 

Feinberg came on board earlier in 2021 after a long stint with Google Health, triggering additional speculation that a merger with the search-engine giant might be brewing. The Oracle deal, then, came as a surprise to many. But that transaction raised a number of intriguing questions about the impact on Kansas City: What becomes of Cerner’s local work-force numbers (roughly 13,500 at year-end)? What will happen with construction at the southland Innovations Campus, currently at only 25 percent of the original projected build-out? After all, it was previously recognized as the largest development project in Missouri history, at $4.45 billion—a not-insignificant chunk of which entailed state incentives.

And, perhaps of biggest concern to the broader business community, what will the new owners’ commitment to civic life and philanthropy look like? Stay tuned….

Chad Williams & QTS Realty Trust 

Billion-dollar deals don’t come along very often in this market, and less so are those in double-digit billions. But Chad Williams, founder of QTS Realty Trust, pulled it off in August when the Overland Park company’s shareholders agreed to sell the enterprise for $10 billion—all cash—to affiliates of The Blackstone Group. 

Blackstone is the world’s largest private-property owner, according to Financial Times. According to SEC reports, Williams still owned shares worth roughly $18 million at the acquisition price of $78 a share. The company has 7 million square feet of data-storage and server farms in the U.S.

The QTS story is not to be confused with “overnight success.” Williams painstak-ingly built it from scratch, draw-
ing on years of experience developing, owning and managing mission-critical facilities. He started with a 35,000-square-foot facility in Overland Park while operating as the Quality Group of Companies, and two years later, QTS was born with the purchase of a large data center in the Atlanta area. 

The company operates more than two dozen similar facilities strewn across 10 states (and two more in The Netherlands)—covering roughly 6 million square feet in all. 

Fred Ross & Custom Truck One Source

In early 2021, the Ross family closed on the sale of Custom Truck One Source to Nesco for $1.47 billion. Custom Truck builds and supplies custom specialty work trucks nationwide.

The company was up to 1,700 employees when the deal was announced in late 2020, a long way from the 15 employees it had upon launch 1996 by six siblings who grew up in Kansas City. Over the course of the next 20-plus years, they built it into a powerhouse, eclipsing $1 billion in revenue for the first time in 2019.

And how’s this as a testament to brand durability: The new parent surrendered its New York Stock Exchange Symbol, NSCO, and now shows up as CTOS, for Custom Truck One Source.

The union, Ross said, rewards stockholders, of course, but sets the stage for creating what he called “one of the largest specialty rental fleets in the country.” Moreover, Ross said, “we are excited to bring a larger platform to our customers and to continue to provide them with the outstanding customer service they have come to expect from both of us.”

Now with more than 1,800 employees in 35 locations, Custom Truck offers specialized truck and heavy equipment solutions with new, used and rental vehicles, parts and tooling supplies, financing solutions and more.

Faruk Capan & Intouch Group 

Tennis buffs will instantly recognize the name Novak Djokovic, ranked as the No. 1 player worldwide for more than seven years; he’s been likened to a “human backboard” for his ability to return whatever is thrown at him. Think of Faruk Capan as his Kansas City business equivalent.

Since founding Intouch Solutions in 1999 as a one-man digital marketing company specializing in the pharmaceutical industry, he’s taken everything that’s come across the net and powered it back over. Among the biggest challenges: The dot-com bust of 2000, as Intouch was just gaining traction; the Great Recession a decade later, and another decade after the dust settled from that one came a global pandemic.

Through it all, Capan expanded his ever-growing team, branching into nine separate disciplines with more than 1,200 employees. For years along that path, Intouch was one of the region’s job-creation monsters, adding employees at ferocious rates and making regular appearances on Ingram’s Corporate Report 100 list of the fastest-growing companies. 

By surging to a record $220 million in revenue during the first year of the pandemic, Intouch had made enough of a splash to attract the right buyer. Capan sold the company for a reported $950 million to Eversana, a Chicago-based agency backed by private equity. The transaction, announced in October, was completed just before year-end.

Peter Mallouk & Creative Planning 

Once upon a time, not so long ago, the monoliths of wealth management in the Kansas City area consisted of American Century Investments, the clear No. 1, with Wad-dell & Reed as the only other firm managing at least $100 million in client portfolios.

Waddell & Reed went away last year, acquired by an Australian conglomerate, but no sooner had the last letter been chiseled into that corporate tombstone than another behemoth emerged. Overland Park-based Creative Planning, which earlier in 2021 surpassed the nine-figure threshold to supplant W&R, doubled that distinction in a single deal.

CEO Peter Mallouk wound down a year of major acquisitions—combined with powerful organic growth—to land Lockton Retirement Group’s $110 billion in assets. That pushed Creative’s total past $210 billion, and put it on a trajectory to threaten American Century’s $250 billion dominance.

With the deal, Lockton’s parent acquired an interest in Creative Planning, giving the latter greater access to global resources and a growth culture that created the world’s largest private, independent insurance brokerage. That partnership will be dubbed Lockton Retirement Services, an Offering of Creative Planning.

“We are going to be able to work together such that any respective weaknesses are now our strengths,” Mallouk said when the deal was announced. “Lockton is still Lockton and Creative Planning is still Creative Planning. In practice, we will be referring our clients to Lockton in areas where it is stronger than us, and the same is true of Lockton. Together, we can work with our respective clients to create a holistic and very powerful service offering.”

Adam Aron & AMC Entertainment  

Moving from the purely transactional to financial operations deal-making, one must ask: Did anyone have a more intense 2021 than Adam Aron at AMC Entertainment? 

The world’s largest movie theater chain shuttered its doors as a global pandemic unfolded in 2020, with predictable results on a company whose lifeblood flows from box-office traffic. As revenues plunged, the immediate speculation from the financial punditry was that AMC’s goose was fully cooked.

Not so fast, Aron might have replied. He pulled the company back from the brink of bankruptcy, securing nearly $1 billion in financing to keep things going until theaters could welcome moviegoers back. But it was a bumpy ride, as the company’s market cap went into free fall, dropping to as little as $300 million.

In addition to Aron’s executive acumen, AMC also benefitted from extraordinary good fortune with retail investors. Thousands of them, rallying to the cries of a Reddit call to action, aligned to attack overly-aggressive short sellers who had punished AMC’s stock price. Following the template of January’s Gamestop stock turn-around, they drove AMC shares from just over $2 a share at the start of the year to a 2021 high of $62.55 six months later, restoring its market cap to $13.63 billion by year-end. 

Nathaniel Hagedorn & NorthPoint Development   

There were no over-the-moon deals in 2021—just more of the same as the Riverside company continued to shake up the commercial-industrial realty on a national scale. 

Consider what Hagedorn and his team have done in less than a decade: They have raised nearly $10 billion in capital, developed and managed more than $126 million square feet of space (largely in warehousing and distribution venues), and added nearly 425 industrial partners. In helping turn this region into a national center of logistics might—starting with development rights to Logistics Park Kansas City in 2012—NorthPoint has been on a nationwide tear. 

In the year just passed, its deals have included the start of work on a $135 million industrial park in south Kansas City, the Blue Hills Commerce Center; started work on a $400 million logistics center near Everette, Wash., and another, valued at $310 million, in the Minneapolis suburbs. It also earned local approval to put three warehouses—of at least 1 million square feet each—into the Keystone Trade Center, where officials in Bucks County, Pa., anticipate a $1.5 billion total investment that could yield 10,000 jobs.

And those are but a few of the recent irons NorthPoint has thrust in the logistics fire, helping the nation bolster its stock of logistics infrastructure in a climate of supply-chain meltdown.

Brad Hardin & Diode Ventures   

There have been some big deals in data-center construction in Kansas City over the years. But there has never been anything like Golden Plains Technology Park.

This massive data-center campus being developed in Kansas City’s Northland will sprawl across more than 880 acres in Platte and Clay Counties, with facilities focused on data, cloud and other hosting services. By the time the entire project is built out, Brad Hardin and the team at Diode Ventures—a subsidiary of Overland Park engineering giant Black & Veatch—will operate more than 6 million square feet of new construction involving more than a dozen buildings. 

Developers already say it will be one of the world’s largest data facilities, worth more than $2 billion in total investment by the time construction wraps up in 2036. That can be a game-changer for the region, elevating Kansas City’s profile as a global center to store, process and distribute enormous volumes of data. 

But why here?

Diode says the Midwest’s locations allows for better network connectivity between coastal data centers, offers greater protection from large-scale natural disasters, and has a power supply that compares favorably with costs from other candidate cities. And it connects this region—or strengthens connections—with global digital powerhouses like Apple, Amazon Web Services, Google and Microsoft, and provide critical mass for the clustering of related enterprises that can build on the regional work force with prized tech salaries.