By Richard Collings
The fourth floor of an aging brick building in the heart of the New York City’s Meatpacking District might be the studio of the latest “it” fashion designer or the lair of a technology company launching the newest dating app.
But not this one. Far from the glass-clad office towers of midtown Manhattan, this space houses a corporate law firm that, in its own way, is just as hot as anything on a runway or smartphone.
To be clear, while the offices of Giannuzzi Group LLP radiate an entreprenuerial vibe, the firm is anything but a start-up. Nick Giannuzzi has been building the practice for more than 20 years since becoming an independent legal adviser to some of the trendiest names in food.
“You work for 20 years, and then you’re an overnight success,” Giannuzzi quipped, as he sat in a conference room, surrounded by shelves filled with his clients’ products and the walls covered with posters advertising those companies’ goods.
GIANNUZZI GROUP FOUNDER NICK GIANNUZZI
The firm’s client roster reads like a who’s who of the fastest growing consumer brands to hit retail shelves during the past few years. The makers of PopChips popped potato chips, Siggi’s yogurt, Suja juice beverages, Vita Coco coconut water and Pirate’s Booty puffed snacks, among others, have sought Giannuzzi’s counsel in recent years .
The list also includes jerky maker Krave Pure Foods Inc., which recently sold to Hershey Co. (HSY) for more than $300 million or more than 9 times revenue. And it includes fruit and nut bar maker Kind LLC, whose founder Daniel Lubetzky bought back a minority stake in his company for about $220 million in early 2014.
Perhaps most famously, the law firm had another long-term client for whom Giannuzzi said he handled all legal matters, including several rounds of financing: Glaceau Vitaminwater parent Energy Brands Inc.
An early client of Giannuzzi’s, Energy Brands would end up selling to Coca-Cola Co. (KO) for $4.1 billion. The law firm advised on the deal, but a larger firm had to be brought in as the lead on it.
In fact, Energy Brands was one of Giannuzzi’s early clients.
WHEN GIANNUZZI WAS 29, he decided to strike out on his own, leaving Winthrop Stimson Putnam & Roberts (now known as Pillsbury Winthrop Shaw Pittman LLP) to form Donovan & Giannuzzi LLP with Nicholas Donovan in 1996. Giannuzzi then parted ways with Donovan to form Giannuzzi Group in 2011.
A typical client back then was the father and son team of William and J. Darius Bikoff, who sought counsel in 1999 having started a beverage company a few years earlier. A couple of months later, Giannuzzi said, the company decided it would be a good idea to put vitamins in water, and Vitaminwater was born.
The relationship he developed with Energy Brands is emblematic of how Giannuzzi has built his firm over the years-taking on entrepreneurs at an early stage when other lawyers and their firms are reluctant to do so. If one of those clients has a hit after the product formulation and brand is in place, it only takes a few years for the company to go from zero sales to desirable acquisition target with tens of millions of dollars in revenue and double-digit growth.
Giannuzzzi eschews midtown’s towers and the imposing wood-paneled formality of many of the advisory firms’ offices located in such buildings. He does that to create an atmosphere entrepreneurs are familiar with and comfortable in. The dress code at Giannuzzi is equally casual, jeans and button-downs, with no ties, and sleeves likely rolled up.
Lawyers are hired straight out of college rather than from other law firms, and the firm’s culture is to work hard, but to enjoy the offices as though they are a second home, Giannuzzi explained.
In addition, by starting his own firm, Giannuzzi has experienced the same anxiety as his clients-the fear of the phone not ringing.
The law firm’s clients seem more than satisfied with the services Giannuzzi renders.
“Much more than legal counsel, [Giannuzzi is] an incredibly valuable partner who gave us fantastic legal counsel, insightful strategic advice [and] access to his Rolodex,” said Sean Olson, founder of snack food company IPS Chips LLC. “If you’re starting a company in the [food and beverage] space, Nick is the guy to work with.”
Krave founder Jon Sebastiani echoes Olson’s praise of Giannuzzi’s network and the access he provides. Sebastiani also noted that “[Giannuzzi] has an unbelievable team that works ungodly hours.” When Krave was in the midst of a round of fundraising or a deal, it would not be uncommon for Sebastiani to be on the phone with Nick Giannuzzi at 1 a.m. He added that he expects he will likely work with the law firm in the future, even after the sale of his company to Hershey.
Giannuzzi said that all of the large transactions his law firm advises on are with clients he has represented since their early stages.
And advising a client from the beginning, when the company has no revenue, he can structure every contract so as to obtain the highest valuation possible in the advent of a sale.
For example, if a beverage start-up signs a contract with a distributor who wants a “forever” contract, Coca-Cola will likely not want to purchase the business, eliminating an important potential bidder. “Forever” contracts make it difficult for a beverage manufacturer to change distributors, even when an incumbent performs poorly.
When it comes time to sell the company, Giannuzzi said, he has attended every board meeting and intimately understands the reason behind every decision, which helps during the due diligence process.
In order to prepare an owner for a sale, Giannuzzi will conduct mock due diligence in which the client prepares a data room. And then the firm goes in and “beats it up,” probing executives on issues such as ensuring that all the trademarks are filed and whether any contracts are expiring.
And if a problem surfaces-say, a trademark hasn’t been registered in Brazil- the company needs to explain why, he said.
Like Energy Brands, Krave also was an early-stage company Giannuzzi said he took on. It is another example of a fast-growing consumer food brand that sold to a publicly traded consumer packaged goods conglomerate for a rich valuation.
Other examples include Preferred Brands International Inc.’s Tasty Bite, acquired by Kagome Corp. in April for 2 times revenue, and Happy Family parent Nurture Inc., which sold for several times its revenue to Danone SA in 2013.
Giannuzzi considers potential clients’ brands, packaging and positioning to determine whether they can win their respective categories. But the founder added that he’s not one to turn away a budding entrepreneur seeking advice. “There’s a sense you don’t want to say no, because you don’t want someone to say no to you,” Giannuzzi noted.
The firm has represented a number of companies that have tapped into the increasing demand for natural and organic foods, and as a result, are desirable targets for food conglomerates under pressure to add good-for-you products.
“I’m lucky to be in the epicenter of one of the biggest areas of growth in America,” Giannuzzi said.
Giannuzzi, however, is better positioned than in 2007 as a firm when it had to hand over a lead legal advisory role to one of the bigger firms when its client Energy Brands was bought.
At the time of the deal, Giannuzzi had only six lawyers, the founder said, but that is not the case today. Giannuzzi insisted, “We have the manpower for any sized deal now.”