Marvin Traub Associates and Atlas Advisors Form M&A Partnership

WWD (July 19, 2011)

After successfully collaborating on several deals together, Marvin Traub Associates and Atlas Advisors have formed a strategic M&A advisory partnership.

The two firms intend to capitalize on MTA’s deep, up-to-date knowledge of the fashion industry and Atlas’ financial expertise. Most recently, both firms advised Amsterdam-based contemporary fashion brand Scotch & Soda in its sale to Sun Capital Partners and Kellwood Holding Corp, and earlier this year worked together on the sale of Rock and Republic to VF Corp.

According to Marvin Traub, chairman of MTA, the new partnership will take a “customer-centric approach to M&A advisory, which weighs not only financial, but also strategic and cultural elements into its process.”

Palden Namgyal, senior managing director of Atlas, added, “The partnership with MTA provides our clients with unique and value-added insight as well as access to key decision makers and entrepreneurs in the retail and fashion sector which is emblematic to our approach to doing business.”

Atlas, which specializes in mergers and acquisitions and corporate finance advisory, has closed more than $30 billion in transactions worldwide since its inception in 2003. It provides services such as financial analysis and valuation to assessment of alternatives and transaction negotiation. Founded in 1992, MTA’s expertise is in business development and strategy consulting. The firm works with brands, retailers, real estate developers and technology companies to understand their trajectories and find new growth opportunities, said Mortimer Singer, president of MTA. “It’s a wonderful complement of left brain and right brain to a problem,” added Singer.

Singer said he and Julian Steinberg, managing director of Atlas, have previously worked on various projects together. “Julian [Steinberg] and I have known each other for a long time. Our two companies were quite complementary in many ways,” said Singer. Since MTA “is not a bank,” he said that whenever he needed strategic help and someone who understood the business, he would call Steinberg.

Describing what is undoubtedly a challenging apparel-retail sector, Namgyal said it’s important to bring both relevant fashion and financial knowledge to the table. “There’s only so much the numbers can tell you,” he said, noting that you need to understand the value of a company. Namgyal said there are always numerous reasons why a company chooses to sell, and no two scenarios are alike. When they worked with Scotch & Soda, for example, the founder-owners had achieved huge business success, and were getting to a size where they could use the skills of a partner. They introduced them to a number of top fashion houses, and the deal with Kellwood came together pretty quickly. For Rock and Republic, he explained, the business was challenged and in bankruptcy. When Rock & Republic ultimately sold its intellectual property to VF Corp., it allowed Rock & Republic Holdings to repay all its creditors one hundred cents on the dollar and allowed founder Michael Ball to receive cash for the excess equity value.

As for current M&A trends, Singer sees a lot of action in international expansion and U.S. companies looking to acquire international brands. He noted that the Middle East, China and Russia have built up war chests and become powerhouses. “Most of what’s on top of people’s minds is Western brands trying to become global brands,” added Traub. He sees a lot of activity in the luxury space, and believes there will be more cross-border deals going forward, as well as action in emerging markets.

All four executives stressed that there are no parameters to the size of the deal that they specialize in. “We try and find relatively unique opportunities. It could be a small jewel if we think a larger strategic [company] would be interested. We take a tailored approach to which opportunities we take on,” said Namgyal. One company that both firms have invested in is called Shop My Label, a social networking shopping site, that will launch in September. “We’re investors and advisers in that company,” said Traub.

What separates Atlas MTA from other M&A firms is what MTA brings to the table, said Namgyal. “No one is set up like this — being able to look at a business as a merchant. We think there’s no one else as deep as MTA in their expertise. In terms of delivering a deep understanding of value in the fashion business, it’s a pretty rare commodity.”