Stubbs Alderton & Markiles, LLP (SA&M) represented client Nexient, a cloud-native company, in the negotiation of the definitive agreement pursuant to which the company has agreed to be sold to NTT Data, a global digital business and IT services leader.
Nexient is more than your average software development firm. Nexient provides cost-effective software development consulting and software development services from US-based innovation hubs in the Midwest and Silicon Valley. The ‘Onshore Outsourcing’ methodology promises to increase the flow of value seen with product development by using an Agile, projects to products (P2P) mindset. This fundamental shift from short-term projects to long-term product ownership ensures lasting value beyond development ideation, through execution and into operation.
The Firm’s Mergers & Acquisition Group advises clients in connection with a full range of mergers, acquisitions, dispositions, joint ventures and other strategic transactions, both public and private, domestic and international. At the commencement of a transaction, we bring our problem solving entrepreneurial spirit and unique practical experience to structure transactions, and to develop a due diligence process that focuses on the key value drivers for the business, including analyzing intellectual property rights and assets. The Firm’s experience and knowledge help ensure that you will successfully negotiate and close the most complicated transactions. Regardless of a company’s size or stage of development, we make our collective expertise, gained from handling a multitude of successful merger, acquisition and strategic transactions, available to each of our clients. The Firm prides itself on being able to devote significantly more high-level attention to our clients’ matters than other sophisticated law firms. Throughout the process, we work with management, keeping them fully informed and strategizing with them as developments arise. We pride ourselves on being highly responsive to our clients.
Stubbs Alderton & Markiles, LLP (SA&M) represented client Funny Or Die (FOD) in the sale of its branded content studio to Roku, and subsequently in the sale of the company to Henry R. Muñoz III, a prominent business leader and philanthropist.
Funny Or Die, an Emmy Award-winning leader in comedy entertainment, has expanded into a full-service video website and television production company that is now the number-one comedy brand across digital, social, and mobile channels.
The sale consists of the Funny Or Die content library, original production slate, and all social media assets that include over 40 million followers. LionTree served as the financial advisor throughout the duration of the deal, while SA&M worked with Funny Or Die as its legal advisor. The deal demonstrates the firm’s commitment to providing clients with top-tier transactional services in the entertainment and media industries.
The Internet, Digital Media & Entertainment Practice Group advises individuals and companies across all aspects of their corporate, strategic and licensing businesses, including in connection with a full range of mergers, acquisitions, dispositions, joint ventures and other strategic transactions. For more information about the Internet, Digital Media & Entertainment practice, contact Greg Akselrud at .
Stubbs Alderton & Markiles’ client ClarityRx, a skincare company based in Newbury Park, has been acquired by Topix, a national skincare products manufacturer backed by private equity firm, New Mountain Capital. Founded in 2003, ClarityRx has a sixteen-year track-record of partnering with the most successful spas and estheticians, including the Hand & Stone spa network.
Stubbs Alderton & Markiles’ attorneys representing ClarityRX in this transaction are Scott Galer and Kelly Laffey.
About ClarityRX ClarityRx® products represent the perfect synergy of plant and food-based ingredients and the latest in cosmetic technology to bring you a healthy alternative for results-driven, clinical skin care. Their products are produced without the use of harsh and harmful synthetic chemicals.
For more information about our Mergers & Acquisitions practice area contact Scott Galer at or Kelly Laffey at
Stubbs Alderton & Markiles’ client New Form, a highly acclaimed digital entertainment studio whose owners included Discovery, ITV, Ron Howard and Brian Grazer, has been acquired by Whistle, a sports and entertainment internet media company. The value of the deal was not disclosed.
ABOUT NEW FORM
New Form is an entertainment studio redefining the way stories are developed, packaged and distributed by producing original narratives that transcend formats and platforms. New Form creates premium video content that resonates with young audiences using data-driven insights to influence its content strategy. For more information visit www.newform.com
Stubbs Alderton & Markiles' represented U.S. Growers Cold Storage, Inc. in connection with the sale of its cold storage business to Lineage Logistics, LLC. U.S. Growers Cold Storage sold eight of its temperature-controlled warehouses in Southern California to Lineage Logistics. The acquisition will bring the U.S. Growers Cold Storage company into the Lineage Logistics portfolio, adding more than 12 million cubic feet of warehousing in the Los Angeles area.
Stubbs Alderton & Markiles, LLP attorney representing U.S. Growers Cold Storage in this transaction was Scott Galer.
About SA&M
Stubbs Alderton & Markiles, LLP is a business law firm with robust mergers and acquisitions, corporate, public securities, entertainment, intellectual property, brand protection and business litigation practice groups focusing on the representation of middle-market public and private companies as well as venture-backed emerging growth companies, investors, venture capital funds, investment bankers and underwriters. Stubbs Alderton represents clients across a full spectrum of industries, including technology, consumer product, entertainment, digital media, videogame, aerospace, apparel and medical device. Our mission is to provide technically excellent legal services in a consistent, highly-responsive and service-oriented manner with an entrepreneurial and practical business perspective. These principles are the hallmarks of our firm.
(Los Angeles, CA - June 19, 2017) Stubbs Alderton & Markiles, LLP announced that its clients, Kravitz and Kravitz Back Office Solutions, have been acquired by Ascensus. Kravitz is a retirement administration firm and Cash Balance specialist focused on bringing its clients the latest in the design, administration, and management of corporate retirement plans. Kravitz Back Office Solutions delivers private-label actuarial services to third-party administrators across the country to help them grow and succeed with Cash Balance plans.
Stubbs Alderton & Markiles' attorneys representing Kravitz in the transaction included Scott Galer and Kelly Laffey.
About Stubbs Alderton & Markiles, LLP Stubbs Alderton & Markiles, LLP is a business law firm with robust corporate, public securities, mergers and acquisitions, entertainment, intellectual property, brand protection and business litigation practice groups focusing on the representation of, among others, venture backed emerging growth companies, middle market public companies, large technology companies, entertainment and digital media companies, investors, venture capital funds, investment bankers and underwriters. The firm’s clients represent the full spectrum of Southern California business with a concentration in the technology, entertainment, videogame, apparel and medical device sectors. Our mission is to provide technically excellent legal services in a consistent, highly-responsive and service-oriented manner with an entrepreneurial and practical business perspective. These principles are the hallmarks of our Firm. Visit www.stubbsalderton.com
Now is a great time for entrepreneurs to sell their companies. However, even in good times investment bankers will tell a seller that the company must be positioned for sale to be successful.
What needs to be prepared to position a company for sale?
The seller must have his or her company financials in good order. This usually means reviewed financials at a minimum. Most sophisticated buyers, like a private equity fund for example, will require audited financials as part of their internal investment criteria. They may also perform a quality of earnings report to detect any flaws in your accounting system or non compliance with GAAP.
You must have your corporate records and minute book in order. This includes your organizational documents, director and shareholder actions, stock register and other customary items. These items should be complete, signed and in the minutes book.
Make sure your contracts are signed, in writing (where applicable), and in one place with all amendments. This will help to expedite the buyer’s due diligence review and reflect favorably on your management skills.
You should also have offer letters or employment agreements, assignments of inventions and nondisclosure agreements in place for key employees, particularly if your business is dependent on key technology and personnel. If you have an HR function, you should have employment policies in place.
Determine the impact on employees if information about a possible sale leaks out to the work force. If that is an issue, handle all due diligence off site or online through a secure website (a data room) and limit the buyer’s access to personnel until the latest possible time.
What legal issues might come up in the sale process?
There are obviously many legal issues that will come up, but here are just a few.
If you have been sued or are about to be, you should have your litigation counsel prepared to explain the status of the cases, the likely cost you may incur if you lose (or even if you don’t lose but have big attorneys fees), the effect on the company’s business, etc. This will surely come up in the buyer’s due diligence. There will likely be an escrowed amount from the sale proceeds to handle the cost of the litigation so as to shift some or all of the risk to the seller.
If you are in a regulated business, make sure you are in compliance with applicable rules and that your counsel can confirm this. The buyer likely will require a legal opinion from counsel to address this and other customary legal issues.
If you are in a technology business, be thinking about how you have protected your intellectual property, including trade secrets, and whether there are any infringement issues. This will be heavily negotiated in the purchase agreement.
How can companies stay on top of contractual matters?
Securing landlord or third-party contract approvals to a sale often takes weeks or longer to secure. If this is going to be an issue in your company, plan ahead and start the process as early as possible — recognizing that the deal may fall apart, so don’t jump the gun too soon.
Check all contracts for change of control provisions to ensure compliance with those provisions.
Start the process early with your lawyer to go over representations and warranties that are likely to be included in a purchase agreement. You will need to be thinking about scheduling exceptions to representations, insurance coverage, environmental matters, undisclosed liabilities, and numerous other matters that will be the subject of representations and covenants in the purchase agreement.
Start thinking about the letter of intent. Will it be binding or nonbinding? Will it go into extensive detail so you know upfront whether you will be able to resolve all material business points at the letter of intent stage? Will there be an earn-out? Will there be a financing contingency? Will you have to provide seller financing? How will the deal be structured? Will there be a standstill period?
Who should be involved in the process and what should be communicated to them?
Locate and engage suitable M&A counsel, accountants (if you do not already have one) and an investment banker to assist in the sale. If your golf buddy is your lawyer, chances are he may not be up to the task of doing an M&A deal. You will need a lawyer that specializes in M&A because it is complicated and part of the negotiations revolve around what are ‘market’ terms in the current environment.
There is often tax structuring necessary to secure a tax efficient sale, so engage tax experts early in the process. The M&A law firm you use will likely have this expertise.
Discuss with your investment banker (if you plan to use one) what they believe is the current market valuation for a company such as yours in today’s market so your expectations are met when the company is marketed. There are investment bankers who handle middle market as well as larger, or smaller, deals. M&A counsel can help you select a banker for your deal.
Even though you think you know all the buyers in your market niche, investment bankers have big rolodexes and have contacts with strategic as well as financial and foreign buyers. Although the investment banker will charge a fee, you can often get a significantly higher price using an investment banker. This is not essential but certainly something to consider carefully.
______________________________________________
Jonathan R. Hodes is a partner of the Firm, and co-chair of the Mergers and Acquisitions Practice Group. Jonathan concentrates in the area of domestic and international business structures and operations with an emphasis on corporate law, securities, and general business law, including international cross-border transactions. He devotes substantial time to buy side and sell side mergers and acquisitions, management buy-outs, leveraged buy-outs, leveraged recaps, mezzanine and senior debt financing transactions, work-outs and secured lending and leasing transactions.
Jonathan’s experience includes a broad range of corporate work including complex public and private, domestic and international mergers and acquisitions with emphasis on middle market companies, purchases and sales of middle market companies, representation of emerging growth companies from inception through various tiers of venture capital financing and IPO’s and corporate finance transactions. He also works on private equity deals with emphasis on add on portfolio acquisitions to existing platforms, and dispositions of portfolio companies.
Jonathan’s practice also includes corporate, partnership and limited liability company formation and ongoing representation; as well as securities offerings including public, private, Rule 144A, and international Regulation S offerings as well as securities compliance matters. He has a broad range of industry experience in many industries, including biologics, money service business, television production and distribution, real estate developers, construction management, technology companies, hotel owners and operators, video game publishers, and the manufacturing sector.
(Los Angeles - July, 2016) - SAM Client RPM Services & Rentals (“RPM” or the “Company”) has been acquired by Hugg & Hall Equipment Company. The Stubbs Alderton attorney who led the deal was Joe Stubbs.
RPM was established by Terry Gold in 2008 and grew quickly to become one of the largest independent equipment rental companies in the Southeast. The Company rents a variety of construction equipment to customers principally serving the region’s onshore industrial markets. The Company operates from locations in Bourg, New Iberia, Morgan City and Gonzales, Louisiana.
Terry Gold, President, stated, “We are thrilled to join the Hugg & Hall team. This transaction presents fantastic synergies for both companies. Hugg & Hall will bring tremendous resources to our employees and loyal customers and together we will execute a smart growth strategy for South Louisiana.”
About Hugg & Hall Equipment Company
Hugg & Hall Equipment Company, headquartered in Little Rock, Arkansas, has been family owned and managed since 1956 and is one of the largest materials and personnel handling equipment dealers in the Mid-south. With 12 full service locations Hugg & Hall is an authorized dealer for Bobcat, Combilift, Crown, Doosan, Enersys, Extreme, Genie, JLG, Manitou, Sellick, Skyjack, Taylor, Terex, Toyota, and Volvo. Hugg & Hall sells new and used equipment, has a rental fleet of 5000 pieces of equipment, and services all makes of industrial and construction equipment with over 6 million dollars of replacement parts in stock and a team of 190 trained ASE certified mechanics. The company recently started a Utilities Services division which focuses on the rental, sales and service of a broad range of generators, air compressors, lighting equipment, and portable cooling and heating equipment
About Stubbs Alderton & Markiles, LLP Stubbs Alderton & Markiles, LLP is a business law firm with robust corporate, public securities, mergers and acquisitions, entertainment, intellectual property, brand protection and business litigation practice groups focusing on the representation of, among others, venture backed emerging growth companies, middle market public companies, large technology companies, entertainment and digital media companies, investors, venture capital funds, investment bankers and underwriters. The firm’s clients represent the full spectrum of Southern California business with a concentration in the technology, entertainment, videogame, apparel and medical device sectors. Their mission is to provide technically excellent legal services in a consistent, highly-responsive and service-oriented manner with an entrepreneurial and practical business perspective. These principles are the hallmarks of their Firm.
Media Contact:
Heidi Hubbeling
Director of Marketing
(310) 746-9803
Stubbs Alderton & Markiles is honored to have received the Dealmaker of the Year Award by ACG101 (Association for Corporate Growth) at their Stars of the 101 Banquet. The Stars of the 101 Banquet benefited the Casa Pacific Centers for Children and Families.
http://www.acg.org/101/events/next1.aspx
The Association for Corporate Growth is the premier organization for professionals involved in corporate growth, corporate development and mergers and acquisitions. ACG 101 serves corporate executives and professionals in the West Valley-Ventura County-Santa Barbara areas.
To learn more about our Mergers & Acquisitions practice, click here.
What is the most important element of providing effective representation?
I believe the most important element in effectively representing a client is understanding their business, strategy and goals. Many times lawyers and other representatives try to solve their client’s problems before they fully understand them. It is crucial to spend the time early on in any representation talking and listening to a client so one can provide guidance and solutions that really address the client’s issues – whether it is in connection with forming a new business or selling a mature business.
You mentioned forming a new business, what issues typically arise?
There are a multitude of issues, from selecting the correct corporate structure, corporation or limited liability company, to developing equity incentive programs to attract the talent necessary to help and manage the company’s growth, and if intellectual property is involved, how best to protect and exploit such intellectually property. To provide effective advice on these matters, your attorney has to have a thorough understanding of the company’s planned business, strategy and goals, as well as the technical expertise and experience.
In connection with a M&A transaction, I assume there are numerous issues that have to be considered and addressed?
Yes, absolutely. And before your attorney can effectively address these issues, they have to understand the motivation behind the transaction and your goals in pursuing the transaction. Is it a strategic combination or a complete sale of the business? Are you retiring or is it a step along a growth path? Is an earn-out or schmuck insurance appropriate, and if so, what is the appropriate structure. There are more issues than can be covered in this forum, but a key to your attorney properly addressing all of them is understanding your business and goals. Hiring an experienced M&A attorney is only half the equation.
Scott Galer is a partner at Stubbs Alderton & Markiles, LLP and co-chairs the firm's Mergers and Acquisitions Practice Group. Scott's practice focuses on counseling private and public middle-market and emerging growth companies in areas of mergers and acquisitions, corporate and securities law and other strategic business arrangements.
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Stubbs Alderton & Markiles’ client ClarityRx, a skincare company based in Newbury Park, has been acquired by Topix, a national skincare products manufacturer backed by private equity firm, New Mountain Capital. Founded in 2003, ClarityRx has a sixteen-year track-record of partnering with the most successful spas and estheticians, including the Hand & Stone spa network.
Stubbs Alderton & Markiles’ client New Form, a highly acclaimed digital entertainment studio whose owners included Discovery, ITV, Ron Howard and Brian Grazer, has been acquired by Whistle, a sports and entertainment internet media company. The value of the deal was not disclosed.
Now is a great time for entrepreneurs to sell their companies. However, even in good times investment bankers will tell a seller that the company must be positioned for sale to be successful.
Scott Galer is a partner at Stubbs Alderton & Markiles, LLP and co-chairs the firm's Mergers and Acquisitions Practice Group. Scott's practice focuses on counseling private and public middle-market and emerging growth companies in areas of mergers and acquisitions, corporate and securities law and other strategic business arrangements.