Dealmakers: Clint Gage and Joel Mayersohn
The Deal: Gage and Mayersohn represented Dreams Inc., a Plantation-based online retailer of licensed sports merchandise, which was acquired by Fanatics Inc. in a transaction valued at about $180 million.
The value includes the purchase by privately held Fanatics of the outstanding shares of Dreams for $3.45 per share in cash and the assumption of debt.
The deal closed June 6.
Details: Along with the Dreams acquisition, Jacksonville-based Fanatics secured a $150 million equity investment from Insight Venture Partners and obtained a $75 million credit line from Bank of America.
In its final quarterly report as a public company, Dreams reported a 25.4 percent increase in revenue from $23.5 million in the first quarter of 2011 to $29.5 million in the first quarter of 2012.
Dreams, a public company listed on the American Stock Exchange, was facing a “crossroads” at the beginning of the year, according to Mayersohn. The company had been approached by firms that were interested in acquiring the retailer, so shareholders had to decide if the time was right to cash out.
“In early January the board brought in an investment banking firm to talk about the different alternatives,” he said. “They could potentially raise capital or look at companies to form a synergistic relationship. They didn’t want to contact hundreds of companies because they were concerned about keeping information as private as possible to not affect the stock price.”
As longtime advisers for Dreams, the attorneys had to ensure a deal would not “breach the fiduciary duties” of the directors, analyze the alternatives, negotiate the merger agreement and prepare a proxy statement.
“Working with the company to get over the hurdle of no longer being a public company and ultimately make the decision to be acquired in a defined process was the most difficult part,” Mayersohn said.
Several suitors took a look at Dreams but eventually dropped out, leaving Fanatics as the primary potential buyer.
“Both of them are really technology-based companies in many ways,” Mayersohn said of Dreams and Fanatics. “They do syndications for a bunch of different teams and run their websites. It includes not just professional leagues but also college programs, running the gamut from all kinds of sports.”
Progressing from thinking about a potential acquisition in January to closing the transaction in June required “people to put their egos aside,” according to Gage.
“These deals are pretty complicated,” he said. “There’s not so much a window of time where you have to close, but for a variety of business reasons the quicker you get to the finish line the better.”
Dreams is still doing business under the Dreams name but as a private company, Mayersohn said. It is also the parent company of sports retailer FansEdge.
“The entities will grow together and take advantage of the relationship,” he said.
Background: Gage and Mayersohn are partners based in the Fort Lauderdale office of Roetzel & Andress. They represented Dreams Inc. They were assisted by Roetzel partners Scot Crow and Paul Jackson and associates Todd Broski and Sara Graditor.