Greenberg Traurig Attorney Worked $310 Million Acquisition Of Cable Producer, Distributor

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Kara McCullough
Kara McCullough

Dealmaker: Kara MacCullough

The Deal: The Greenberg Traurig attorney oversaw a legal team representing Saltaire, England-based Pace plc in its acquisition of California-based Aurora Networks Inc. for $310 million Jan. 6.

Details: The Fort Lauderdale shareholder represented Pace, a publicly traded company with an office in Boca Raton, on corporate work but never did any acquisitions for it. On Oct. 13, MacCullough got a call from the company's general counsel asking for help with its first big deal in years.

Pace, a $1 billion company, is the leading producer and distributor of cable boxes, routers and other software used by cable television companies. The company was looking to expand and wanted to acquire Aurora Networks, a leading developer and manufacturer of next-generation optical transport and access network solutions for broadband networks. The deal would have to be financed.

MacCullough had the tightest time frame of any deal she has done before—just 10 days—because the Pace CEO wanted to announce the acquisition at a major industry event Oct. 23. That deadline was reached, and the deal closed this month.

"From the time we were told you have an exclusive negotiating window, we had 10 days to do due diligence and negotiate," she said. "I've never done a deal this fast. We worked like crazy people to get this done."

MacCullough's first task was to assemble a team of Greenberg Traurig attorneys around the country with expertise in corporate, intellectual property, labor and employment, technology, real estate and tax law.

MacCullough and Elizabeth Fraser, a Boston associate, led the mergers and acquisition team, while Jeffrey Wolf, a Boston shareholder, was tapped to lead the finance team. The team included Fort Lauderdale shareholder Harry J. Friedman, Miami shareholders Mindy Leathe and Steve Lapidus, Boston shareholder David J. Dykeman and associate Bethany Stokes, Sacramento shareholder James Nelson and associate Angela Diesch, New York shareholder Mary Voce and of counsel Mary Marks, and Chicago shareholder Sean Bezark.

The team's responsibilities included conducting due diligence, negotiating equity commitments for financing and putting together a management incentive pool to ensure senior people stayed with the combined company.

Pace funded the purchase price through a $310 million, five-year loan and will refinance existing debt with a new $150 million revolving credit facility. The new financing was provided by HSBC USA N.A. and RBS plc as joint underwriters, bookrunners and mandated lead arrangers, and JPMorgan Chase Bank & Co. was the lead arranger.

To get the deal done by the deadline, the lawyers worked up to 20 hours a day. Conference calls were done with the London office starting at 3 a.m. and with the California office at midnight Eastern time.

"I don't think Elizabeth or I slept the final three days," MacCullough said. "It had to be a 24-hour show."

One major complication that threatened to kill the deal involved the tax structuring.

"The tax issues were very complicated," MacCullough said. "We were very concerned about whether we could make it work because of the tax issues. That's why we ended up restructuring the deal and coming up with some creative restructuring where we paid for some tax benefits up front."

The solution was to borrow $13 million in tax benefits payable at closing and to be recovered over the next three years.

Although nearly a done deal, it still required Pace shareholder approval. An offering circular cleared the way for 99 percent backing, which McCullough called "a huge number."

"Obviously shareholders think it's a great deal," she said.

MacCullough celebrated the deal by sleeping for two days straight.

Quote: "I hand-picked the team," MacCullough said. "We have lots of great lawyers, but I always pick the ones that I think will have the skills for a particular transaction but will also fit with a particular client."

Background: MacCullough advises public and private companies on corporate and securities law issues. She previously worked as a shareholder at Holland & Knight and Akerman, and started her career as an investment banker in Latin America.

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