VOL. 39, NO. 38
SEPTEMBER 17 - 23, 2018
Source Lunch
Akron Recent acquisitions help Timken diversify its offerings. Page 32
CLEVELAND BUSINESS
Real estate finance guru Ryan Sommers Page 35
The List The largest coworking spaces in NEO Page 22
HEALTH CARE
SUMMA HEALTH BEGINS BRIDGING ITS FINANCIAL GAP Illustration by erhui1979/Getty Images
After a tough 2017, the health system is seeing a turnaround in its operating income By LYDIA COUTRÉ lcoutre@crain.com @LydiaCoutre
Following a multimillion-dollar operating loss in 2017, Summa Health in the first half of this year managed to achieve a $43 million turnaround of its finances and is
back in the black. Dr. Cliff Deveny, the system’s interim CEO who in the spring signed on for a second year at the helm, credits the turnaround not to one grand move, but to a lot of “blocking and tackling” and work across the system to lower costs and increase access. For example: expanding hours, moving SummaCare to a new
Small Business Women are key to diversifying business leadership. Page 12 Chagrin Valley Soap & Salve is cleaning up. Page 14 Entire contents © 2018 by Crain Communications Inc.
“For our improvement, probably $2 out of every $3 was because of growth, increased revenue.” — Dr. Cliff Deveny, Summa Health interim CEO
loss. Deveny took swift action — eliminating about 300 positions, discontinuing services, consolidating units and re-evaluating ongoing capital needs — to right the ship, and by the end of the year, that loss was $28 million, rather than the $60 million projected if the system hadn’t made any adjustments. SEE SUMMA, PAGE 33
FINANCE
Simmering U.S.-China trade war is bearing down on M&A sector By JEREMY NOBILE jnobile@crain.com @JeremyNobile
Sean Dorsey, founder and CEO of Cleveland investment bank League Park Advisors, was working on a deal involving the purchase of a farm equipment seller before the effects of the tariff-driven trade war with China began to materialize. Major equipment sales have dialed back lately, Dorsey said, be-
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headquarters that saves $1.5 million a year, growing clinical capacity and more. “Everybody had to look at things,” he said. “Whether it was revenue cycle or supply chain or occupancy rates or do you have enough, too many resources for what we’ve got.” Summa ended the first six months of 2017 with a $33 million operating
cause of a slowdown in projected revenue growth for businesses that consume steel — like machinery manufacturers — in the wake of higher input costs, which are a function of the tariffs imposed under President Donald Trump. “In the farm world, the agricultural marketplace is on pause at some levels to see what happens with these trade wars,” Dorsey said. It’s a regional example of how the trade war is beginning to show some tangential effects in the business world.
At a time when the overall M&A sector has been running hot — strategic and financial buyers are eager to put piles of capital and dry powder to work through acquisitions, while high-performing potential sellers are enticed by soaring company valuations — the trade war is making buyers question the value of deals they would’ve otherwise pursued earlier this year. “I do think it will slow down deal flow,” Dorsey said. “Uncertainty SEE TRADE, PAGE 3
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