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The sound of a single stockholder unloading 17 million shares reverberated in the ears of Wilson Sonsini Goodrich & Rosati partner Thomas DeFilipps as he stood on the floor of the New York Stock Exchange for the closing bell on the first day of Dolby’s IPO. Dolby Laboratories Inc.’s public launch was reportedly the first time in NYSE history that the bell’s sound was altered — appropriately in this case by ringing in surround sound. But that the San Francisco-based company’s public launch was on the NYSE — as opposed to the NASDAQ — was proof itself for DeFilipps and the Wilson team that this was no ordinary technology company offering. “[It's unusual] to right out of the box take a company public on the NYSE,” said DeFilipps. “The listing standards are higher, but because of its size and profitability, [Dolby] met those tests.” The market agreed, and Dolby’s stock, which had been priced at $18, soared above $24 on opening day. The company, which sold 10.5 million shares apart from Ray Dolby’s holdings, raised $172 million after expenses. The offering required additional coordination because of the Dolby firm’s unusual history and structure. “The company had been organized for the purpose of benefiting the sole shareholder [Ray Dolby],” said DeFilipps. “There were things that had to be undone to go down the path of being a public company.” The deal made Dolby, 71, the company’s founder and for many years its only stockholder, a billionaire. Dolby collected $306 million from the IPO. He still owns another 68 million shares valued at $1.65 billion. One challenge was deciding how and how much of Ray Dolby’s IP would be transferred to the company. Prior to the IPO, Dolby Laboratories paid Dolby millions in quarterly royalties. Ultimately, the founder handed over all of his intellectual property claims. The deal was complicated because every decision required collaborating with lawyers for Ray Dolby as well as for the underwriters. DeFilipps said the entire process took 18 months — as opposed to the four to six months it takes to complete most offerings. Larry Sonsini helped out with the offering. “It was very comforting for the board. �” said DeFilipps. “They had all the resources of the firm, including Larry, to bring to bear.” DeFilipps said his longtime friendship with Dolby’s EVP of Business and Finance, Martin Jaffe, helped land the business. (Their wives attended high school together.) Wilson Sonsini’s team included partners Herbert Fockler, Selwyn Goldberg, Terry Kearney, Ivan Humphreys, Roger Stern, David Della Rocca, Eileen Marshall and Marc Gottschalk, and associates James Clessuras, Mark Baudler, David Jedrzejek, Katherine Haar, Jonathan Chan, Randy Cinco, Lia Rose Alioto, Scott McCall and Jenna Jones. Ray Dolby was represented by Morrison & Foerster partners Justin Lee Bastian, Patrick McCabe, Paul Jahn, William Sherman and of counsel Thomas Kostic. Sidley Austin Brown & Wood attorneys represented the underwriters. Marie-Anne Hogarth FIRST TIME FOR HANSON, BRIDGETT Hanson, Bridgett, Marcus, Vlahos & Rudy had never handled an IPO, said partner Fred Weil, when client American Reprographics Co. decided last summer to go public. But, with a bit of help, the firm ushered its client through a Feb. 9 sale of about $175 million in stock. Glendale-based ARC, which had initially announced plans to sell in the $14 to $16 range, lowered its offering price to $13, and the stock has been selling steadily just above that mark. Weil said Hanson, Bridgett — a firm known more for public agency representation than transactional law — was ready to do whatever was necessary to make its first IPO successful. Through six months of work, the firm clocked its share of all-nighters, assigned additional lawyers and even sought the help of another firm. “There are so many pieces that are required for a project like this,” Weil said. Hanson, Bridgett’s eight-lawyer team was led by partner Teresa Pahl, who had experience with public offerings before she came to the firm. For the rest of the Hanson, Bridgett team, the IPO was unfamiliar ground. “It was a wonderful experience, and a very huge time commitment,” said Weil. The IPO had several complications stemming from ARC’s structure as a limited liability company. “It was a roll-up entity,” said Weil, that had grown steadily by acquiring other companies. Going public required incorporating ARC. On the more arcane aspects of SEC law, Hanson, Bridgett reached out to Orrick, Herrington & Sutcliffe partner Brett Cooper. Weil said the collaboration reminded him of a friendlier legal era. “There was a time, and I’d like to think it still exists, that lawyers, as professionals, would provide professional assistance when asked,” said Weil. “Law does not have to be a cutthroat profession.” Now that ARC is public, Weil said his firm has the experience to expand its IPO practice, both for existing clients and new clients. “We would probably require much less assistance on the next one,” he said. In addition to Weil and Pahl, Hanson, Bridgett partners Jonathan Storper and Constance Hiatt, senior counsel Scott Smith, and associates Catherine Dwyer and Marcus Wu worked on the deal. — Justin Scheck

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