Consumer Products

Building & Financing Consumer Products Companies

• Represented a leading alternative creamer company in its Series B preferred financing led by a large private equity fund.
• Represented a leading beverage company in its Series D preferred financing led by a large private equity fund.
• Represented a high-end hunting gear company in the $50-million sale of a minority interest to a leading consumer growth equity firm.
• Represented a coffee brand in its seed financing, conversion to a corporation, and subsequent $25-million convertible note financing.
• Represented a private equity sponsor in its majority acquisition of a pet food company.

Protecting Products, Brands & Commercial Relationships

• Obtained hundreds of patents and registered trademarks for clients across consumer-facing industries, including toys and exercise equipment.
• Advised consumer products companies on domestic and international trademark portfolios, brand protection, licensing, online enforcement, anti-counterfeiting, and intellectual property disputes.
• Represented a U.S.-based branded clothing retailer in the restructuring of its Chinese manufacturing facilities.
• Negotiated and drafted licensing, distribution, dealer, sales representative, and other commercial agreements for companies bringing products to market in the United States and internationally.
• Protected consumer products companies in trademark, trade dress, design patent, copyright, domain name, and unfair competition disputes.

Mergers, Acquisitions & Successful Exits

• Represented majority shareholders of a healthy snack company in its $340-million sale to an international food brand.
• Represented a consumer products manufacturer in its $30-million sale to a private equity-backed strategic buyer.
• Represented Oakley in its $110-million acquisition of Eye Safety Systems, $55.7-million acquisition of Oliver Peoples, and acquisition of The Optical Shop of Aspen.
• Represented DC Shoes in its $50-million acquisition by Quiksilver and Prana in its $50-million acquisition by Liz Claiborne.
• Represented a climbing and outdoor footwear company and a surf company in acquisitions by private equity firms.
• Represented large privately held fitness-center chains and their owners in sales of more than 75 U.S. and Asian fitness centers in two transactions valued at more than $100 million.

When should a consumer products company involve legal counsel?

Legal counsel can add value from the earliest stages of building the company and developing a product. Decisions involving company formation, financing, ownership of intellectual property, manufacturing relationships, distribution, and commercial agreements can affect a company’s ability to grow and attract investment later. As the business expands, counsel can also help with new markets, acquisitions, disputes, and eventual exit planning. The goal is to address important legal issues when there is still flexibility to structure them well.

How should we protect a new product and brand before going to market?

Start by identifying what creates value and differentiates the product. Depending on the circumstances, utility or design patents may protect functional innovations or product designs, while trademarks and trade dress can protect names, logos, packaging, and other brand elements. Copyright and trade secret protection may also be important. An effective strategy considers these protections together and puts them in place early enough to avoid jeopardizing rights or investing heavily in a brand that cannot be protected. Procopio attorneys have obtained hundreds of patents and registered trademarks across consumer-facing industries and manage domestic and international brand portfolios.

What should we consider when working with a contract manufacturer or supplier?

The agreement should clearly address the commercial terms of the relationship and what happens when things do not go as planned. Depending on the arrangement, important considerations may include product specifications and quality standards, pricing, production and delivery commitments, ownership of tooling and intellectual property, confidentiality, warranties, indemnification, and termination rights. International manufacturing arrangements can add cross-border legal, tax, intellectual property, and dispute-resolution considerations. Our experience includes advising consumer products companies on manufacturing relationships in the United States and internationally.

What should we consider when expanding distribution or entering new markets?

Expansion can create opportunities while also changing a company’s legal and commercial risks. Distribution and licensing agreements should address issues such as territory, exclusivity, performance expectations, brand control, intellectual property rights, and termination. Entering international markets may also require additional planning around local laws, tax, import and export requirements, and protection of trademarks and other intellectual property. Our attorneys work with companies and foreign counsel around the world to help coordinate these issues as businesses expand.

What should we consider when raising capital to grow a consumer products company?

Start with what the capital is intended to accomplish, whether that’s increasing inventory, expanding manufacturing capacity, growing distribution, entering new markets, marketing products, or pursuing an acquisition. The financing itself can affect ownership, control, governance, and future strategic options. Founders and owners should understand valuation and dilution, investor rights, board representation, future financing needs, and how current terms could affect a later transaction or exit. Our attorneys represent consumer products companies in venture, growth equity, private equity, and other financing transactions.

When should we start preparing for a potential sale of the company?

Well before a sale process begins. Buyers of consumer products companies may closely examine ownership and protection of product and brand intellectual property, manufacturing and supply arrangements, distribution and licensing agreements, major customer relationships, corporate records, employment matters, and other potential liabilities. Identifying and addressing issues before due diligence begins can strengthen the company’s negotiating position, reduce delays, and help protect the value owners have built. Our attorneys have represented consumer products companies and their owners in strategic sales and private equity transactions across a wide range of product categories.