XPRT merger play
LECG Corporation Completes Merger With Smart Business Advisory & Consulting
EMERYVILLE, CA -- (Marketwire)
03/10/10
LECG Corporation (NASDAQ: XPRT), a global expert services firm, today announced the closing of its merger with SMART Business Advisory & Consulting, LLC (SMART), a privately-held provider of business advisory services. With the addition of SMART, LECG increases its talent pool of premier consultants and expands its client base to include SMART's Fortune 200 customers. The combined company is expected to generate improved financial performance, with incremental revenues from cross-selling opportunities and SMART's financial advisory and business consulting practices including technology, business process improvement, compensation and benefits, accounting, actuarial and tax.
"After months of planning, we are excited to realize our shared vision of creating one of the leading business advisory services companies in the industry," said Steve Samek, former CEO of SMART, who will become CEO of the combined company. "Together, our broadened service portfolio will help our clients navigate through the dynamic industry changes and impending market recovery."
"We have already begun working aggressively to integrate the companies and expect to implement a number of organizational efficiencies and recognize associated cost synergies. As the market returns, we should be well positioned to capitalize on the complementary nature of our businesses and growth opportunities that lie ahead," added Samek. "I would also like to thank the employees of both firms for their exceptional efforts and commitment during this merger process. Their contributions to our current clients are the foundation upon which the combined company will continue to create value in the marketplace."
"Today's completion of this important merger will help allow us to deliver substantial value to our stockholders, customers and employees," said Garrett Bouton, Chairman of LECG's Board of Directors. "The shared knowledge and expertise of these two firms brings together an exceptional team with proven experience in many areas of the professional services industry. With the closing of this transaction, I believe we have built a stronger, more diversified company, and I look forward to working with the combined team to help realize LECG's full potential."
Under the merger agreement, LECG issued approximately 10.9 million shares of common stock to acquire all of SMART's outstanding shares. Concurrently, LECG issued approximately 6.3 million shares of a newly created Series A Convertible Redeemable Preferred Stock at a purchase price of $3.96 per share in exchange for a $25 million cash investment in the combined company by Great Hill Partners. The company anticipates these transactions will be accretive in 2010 and expects to realize business and margin improvements in 2010, including at least $6 million in annualized operating savings.
Part of the anticipated cost savings will include the consolidation and move of the combined company's corporate headquarters to the suburban Philadelphia area, where SMART is currently based. The move, which is scheduled to be completed by the end of the third quarter, is intended to position the combined company for future growth by creating a unified platform from which to build common practices and capitalize on growth opportunities, while streamlining and leveraging its infrastructure
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