Thanedar’s biz record marked by triumphs, tribulations
The bank was selling the business Shri Thanedar had built from the ground up, forcing him to give up his leased cars and preparing to foreclose on the Missouri mansion he’d helped design when he and his wife packed a rental truck in late 2010 and started out for a new life in Michigan.
Eight years later, after successfully growing and selling another chemical testing analytics company in Ann Arbor, the entrepreneur scientist is spending millions of his own dollars in a quest to become Michigan’s next governor. Recent polls of the 2018 race show him gaining ground in the Democratic primary as he floods the airwaves with television ads.
Thanedar’s rags-to-riches story, which begins with stretches of childhood poverty in his native India, includes the forced sale of a small business empire he started in Missouri after working as a post-doctoral scholar at the University of Michigan in the early 1980s.
He blames the Great Recession, which wreaked havoc on the national economy in the late 2000s, but admits mistakes: A pharmaceutical firm he had nearly sold for $132 million was too reliant on startup and venture-funded business clients. When those customers began going belly up, so did profits, leaving him in a tight spot when Bank of America came calling to collect on loans.
“I’m battle-tested now,” Thanedar told The Detroit News in an hour-long interview, making the case for why voters should pick him to lead the state after a business career marked with triumphs and tribulations.
“Look at everything I’ve gone through. Certainly we will have another recession in the next two to four years, and if I am not disrupting this process, we will have a career politician with zero job creation experience as our next governor.”
Detroit News interviews and research reveal Thanedar to be an ambitious entrepreneur whose appetite for growth may have left him and his old companies vulnerable to economic collapse. Past associates praise his ideas and eye for talent, but one turnaround specialist said Thanedar had “neglected” his business before rebuilding his career in Michigan.
He has weathered multiple lawsuits and is now fighting another.
“When it comes to the ego department, Shri takes a backseat to nobody,” said Terry Bartz, formerly of MorrisAnderson, the firm appointed in 2010 to run Thanedar’s surviving businesses after a bank forced the shutdown of one company. “He is a serial entrepreneur, I’ll give him that. He picked himself up after getting knocked down and came roaring back and built another company and sold it. I think he’s a plenty resilient guy.”
Thanedar’s early spending has helped boost his name identification and positioned him as a viable challenger to early Democratic frontrunner Gretchen Whitmer, but competitors could make his business record a campaign issue, said Dave Dulio, chairman of political science department at Oakland University.
“It’s a risk if you’re running as a successful businessman and you have a blemish like that in your past,” Dulio said. “ ... It would be very likely brought up by his opponents, and I would be surprised if they do not.”
Thanedar found new success in Michigan, where he started the Avomeen Analytical Services with his son in late 2010. He sold a majority share for around $20 million in late 2016 and gave his 50 employees a collective $1.5 million bonus as he relinquished control of the company.
But the purchaser, High Street Capital, sued Thanedar in November, alleging he made “fraudulent and misleading” claims to inflate the value of Avomeen. He vehemently denies the accusations and is fighting the suit in federal court.
“I could have settled this and made it go away, definitely, but I just told them I didn’t do anything wrong,” Thanedar said, alleging the Chicago-based private equity firm tried to use his candidacy as leverage to renegotiate the selling price. “That’s the kind of person I am. I don’t get easily bullied. ”
The rise
Thanedar made a fortune in Missouri — and he wasn’t shy about showing it off.
He once gave a St. Louis television station a tour of his mansion on three acres in suburban Ladue, highlighting its seven fireplaces, a pool with seven fountains, a theater stage with a green-room area for artists, a 160-inch projection television, sauna, steam room and more.
“We plan it to be a party kind of house,” he said in the segment that was on YouTube until late March, pointing out his personal bar had two refrigerators, a dishwasher, ice maker and trash compactor. He also had a Ferrari and a Rolls-Royce, according to local news coverage.
“When I succeeded, I did live well, but I thought I earned it,” Thanedar told The News.
He also said he suffered through poverty in India, worked as a janitor in high school to support his family and slept in his car during summer breaks in graduate school. “I understand how the poor people live,” he said, “and I understand the hardships they have.”
Thanedar was born in India in 1955, immigrated to the United States in 1979 to pursue a doctorate in chemistry at the University of Akron in Ohio and came to Michigan for post-doctoral studies in 1982.
He moved to Missouri for a chemist job in 1984 and in 1990 used a bank loan to purchase Chemir, a small chemical analysis services business, for $75,000. The company had three employees when he bought it but grew to 25 workers by 2000 and was pulling in $4 million in annual revenue, he said.
Flush with success, Thanedar said he borrowed another $24 million over the next eight years as he purchased a series of small businesses across the country, including companies that eventually became the Florida-based Azopharma, a contract pharmaceutical research and development firm that nearly sunk him.
The fall
“I do think the exploding economy had something to do with it, but it was really more that company in Florida that took it all down,” said Bartz, whose firm was appointed to run Thanedar’s other businesses after Bank of America liquidated Azopharma.
More than 300 Azopharma employees lost their jobs, said Thanedar, who added that he had tried to fight for them by working 18-hour days during the recession. He had been spending more time in Florida, where he also owned a home.
Bartz and his colleagues were tasked with restructuring Chemir and the neighboring Cyanta pharmaceutical testing lab in Missouri, along with CAS-MI, an analytical chemistry lab in Ypsilanti that Thanedar also owned.
Their goal was to sell the companies at a maximum return for the bank, something Thanedar also wanted to protect other personal assets. MorrisAnderson eventually negotiated a $23 million sale to Evans Analytical Group Inc., more than five times the initial $5 million offer Bank of America had rejected a year earlier.
Chemir had been “neglected,” Bartz said, but after his team made a series of structural changes, business started to boom again and the company grew during the one-year receivership, adding about 25 employees.
“I think Shri is a pretty good talent scout,” Bartz said. “We changed the business model and did some stuff differently, but in terms of the personnel, we worked with all of the people Shri had hired.”
The financial consultant said he rarely interacted with Thanedar when his firm first took over Chemir, but as the sale neared, they began talking more often and became “like friends.”
Still, Thanedar came across like a “chess player” who never truly opened up to him, Bartz said, declining to say whether he thinks the businessman would make a good governor.
A St. Louis Post-Dispatch columnist in 2011 called Thanedar’s story a cautionary tale, describing how his hard work unraveled with “hubris.” Former Chemir CEO Dave Riggs praised Thanedar for his initial work but told the newspaper Thanedar eventually “fell in love with himself” and in the company’s last few years “took his eye off the ball.”
Those are mischaracterizations, Thanedar argues. “My cockiness did not make the recession happen,” he said.
Riggs, who would go on to work for Thanedar again at Avomeen, declined an interview request in late March. He said he signed a document as part of his separation and company buyout that prohibits him from saying anything about his former boss for two years.
Former Azopharma chief financial officer Dan Cammarata, who lives in Florida, laughed when told Thanedar was running for governor but declined to comment on his business record. Cammarata said they “did not have the best rapport” as business colleagues but did not elaborate.
The rebound
After returning to Michigan in late 2010, Thanedar said he spotted a 2,500-square-foot rental space on Jackson Road in Ann Arbor and purchased the former lab for $36,000. He started a new chemical analysis company with his son, who had recently graduated from UM’s Ross School of Business.
Avomeen grew quickly, with company revenues jumping from $700,000 in 2011 to $8 million or $9 million by 2015 , according to Thanedar, who added employees and purchased a larger 25,000-square-foot space. In 2016, he won a regional “entrepreneur of the year” award from Ernst and Young, a recognition he had also earned nine years earlier in Missouri.
“I learned from my mistakes,” Thanedar said, describing how he built his new company to be less reliant on the kind of startup business customers Azopharma had depended on. “Avomeen was recession-proof.”
By 2016, Thanedar said he was making plans to step away from the business as he considered a “bigger calling.”
The Flint water crisis had drawn his attention to the failures in Michigan government, he said, and his dismay over Trump’s victory in the November presidential election steeled his resolve to enter politics.
“A day after Trump got elected, I pretty much realized my calling is to go serve the people and devote myself to public life and public service,” Thanedar said. “I also realized there’s no better way to serve the public than being the governor of this great state.”
Thanedar is running as a “progressive” Democrat. He says he wants to ban for-profit charter school operators, move to a graduated income tax from the current flat rate of 4.25 percent, legalize marijuana, increase the minimum wage from $9.25 an hour to $15 and create a universal health care system for Michigan.
He has committed nearly $6 million of his own money to his 2018 campaign and made clear he’s willing to spend more. While he is polling behind Whitmer, a former state Senate minority leader from East Lansing, Thanedar is spending heavily on television ads and is now the most recognizable name in the Democratic field.
The race
But “name ID is an inch thick at this point,” said pollster Richard Czuba of the Lansing-based Glengariff Group Inc. “There is a real public campaign that has yet to be run based on issues, based on backgrounds, and I’m not sure Shri Thanedar has been thoroughly vetted yet.”
As a political donor, state and federal records show Thanedar has primarily given to Democrats, including $15,000 to the Obama Victory Fund in 2012. But four years earlier, he donated $2,300 each to the primary campaigns of Republican Sen. John McCain of Arizona and Democrat Hillary Clinton.
Thanedar introduced himself to Michigan voters in an expensive February Super Bowl ad that poked fun at the difficulty some people have with pronouncing his name.
“I’m not Rick Snyder rich,” Thanedar told The News, referencing term-limited GOP Gov. Rick Snyder, another Ann Arbor businessman who burst onto the political scene with a Super Bowl ad in 2010.
“This is a big chunk of my net worth, and I’m doing it because I’m passionate about helping Michiganders,” he said. “Career politicians have given us lip service, they haven’t solved the problems.”
Thanedar and his companies have been the subject of several lawsuits in past years, but most cases reviewed by The News were dismissed or withdrawn. In 2011, a former Chemir employee alleged he was fired after complaining about age- and race-based discrimination. In 2012, the firm that bought his companies in receivership alleged he had poached Avomeen employees from CAS-MI.
Neither of those suits had any merit, said Thanedar, who chalked them up to the price of doing business.
“Democracy is wonderful, but if you have $300 you can sue anybody for anything,” he said. “In the business world, lawsuits happen and sometimes people use lawsuits as strategic things to negotiate, but I’m pretty strong and I don’t take this. I have fight in me, and that’s who I’ll be as governor.”
A former Avomeen employee has alleged, under oath, that he had to go around Thanedar to alert the Food and Drug Administration that a company client was selling a male “herbal supplement” spiked with prescription Viagra, a situation Thanedar said he does not recollect.
His business record has opened Thanedar up to criticism from at least one other candidate in the Democratic primary.
“It smells a lot like Donald Trump and Rick Snyder, and I think Michiganders are done with that,” said former Detroit health director Abdul El-Sayed. “You shouldn’t be able to buy an election. It should be waged on ideals and ideas, and I’m tired of people posing as progressives who are playing by a Republican script.”
joosting@detroitnews.com
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Twitter: @jonathanoosting
Shri Thanedar
Age: 63
Residence: Ann Arbor
Family: Second wife Shashi, two adult sons from first wife, who died in 1996
Political career: No prior experience
Business career: Chief executive and owner, Chemir Analytical Services in Maryland Heights, Missouri, 1990-2010. Chairman and owner, Azopharma Contract Pharmaceutical Services, Miramar, Florida, 2003-10. Owner, Lycoming Analytical Laboratories, DuBoistown, Pennsylvania, 2003-05. Founder of Avomeen Analytical Services in Ann Arbor, 2010-present.
Source: Detroit News research