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Life is Good Case Study

The Situation

In April 2004, Life is good CEO Bert Jacobs set a strategic objective for his company: the acquisition of the United States Licensee of the Life is good brand. This was a critical action item as Life is good and the Licensee had very different visions for the long term success of the Life is good brand. The challenge of the acquisition was that most of Life is good’s value was intangible. There was ample cash flow from sale of product and the resulting royalties, but Life is good did not have significant property and equipment or other hard assets that would be useful to obtain conventional financing. Additionally, since Life is good had shifted to a design and royalty model from a distribution model a few years prior, there was no full time accounting and finance personnel to develop financial projections to support the business plan.

What Braver Did

Braver played an integral part in making the acquisition happen.  Here is what we did:

• Assisted with the drafting of a business plan and compiled the forecasted balance sheets, income statements and cash flows for the acquisition of the Licensee
• Developed a valuation model to determine the parameters of an offer for the Licensee's business assets and assisted in negotiating a purchase price
• Identified potential lenders to assist with the financing – both traditional banks and alternative sources and assisted in selection of mezzanine financing
• Worked with a legal team to develop an asset purchase agreement and led due diligence process in verifying accuracy of asset values and in understanding Licensee's business
• Assisted bank and mezzanine lender and their counsel with understanding of  the business and financial plan and with document flow
• Post-closing: helped the COO of Life is good evaluate personnel coming over from Licensee and assisted in developing responsibilities of the finance and accounting team
• Worked closely with the controller in monitoring actual operating results against budget and in watching the financial ratios and other operating results set as covenants by the lenders

The Outcome

Bert Jacob's vision of long-term success for the Life is good brand was realized through our help in acquiring the company’s Licensee. Life is good has increased its business five-fold and the brand is renowned nationally. The product line has expanded thoughtfully and in the spirit of the company’s driving message: "keep the good vibes flowing." 

Over the years, we have helped Life is good develop a buy-sell agreement estate plans for key employees, reviewed and provided critical feedback on significant contractual documents including licensing agreements, and we have helped negotiate the purchase  and recruit and hire a new controller, established a qualified retirement plan, establish financing for the real estate that is now  the Company’s corporate headquarters .  We have also advised Life is good on the design and subsequent upgrade of retirement plans, the design of an incentive compensation plan for executives, facility lease negotiations and the creation and registration of a charitable foundation to serve the not-for-profit mission of the company.