Elena,
Thank you for signing and returning the engagement letter yesterday. With that formality complete, I am pleased to confirm that Calderwood & Harkness LLP is now formally engaged to represent Cascade Retail Holdings Inc. (Nasdaq: CRHI) in connection with the proposed acquisition of 100% of the outstanding capital stock of NovaMart Global Inc. As we discussed last week, timing on this transaction will be important, and I wanted to write promptly to confirm the scope of our representation, introduce our team, and outline the anticipated work plan so we can hit the ground running.
**Scope of Engagement**
We will represent Cascade in all aspects of the proposed acquisition of NovaMart, a Delaware corporation headquartered in Austin, Texas. Based on our preliminary discussions, the transaction is expected to be structured as a stock purchase for an aggregate purchase price of approximately $1.2 billion, all cash, governed by Delaware law. Our scope of representation encompasses the following:
- Structuring advice (stock purchase vs. asset purchase vs. merger analysis — memo to follow shortly) - Negotiation and drafting of the definitive stock purchase agreement and all ancillary transaction documents - Comprehensive due diligence review of NovaMart and its operations - Antitrust analysis and Hart-Scott-Rodino Act filing and clearance process - Tax structuring and analysis - Acquisition financing review and documentation support - Third-party consent analysis and management - Employment and retention matters for key NovaMart personnel - Representations and warranties insurance placement support - Preparation of all closing deliverables and management of the closing process - Post-closing support as needed (indemnification, escrow, working capital adjustment)
**Calderwood & Harkness Team**
I am assembling a strong team for this engagement. The core group is as follows:
- **Harrison Wexford** — Responsible Partner. I will provide overall supervision, lead negotiations with seller's counsel, and serve as the primary relationship partner for Cascade. - **Beatrice Holloway** — Billing Partner. Beatrice will coordinate all billing matters and also provide substantive M&A support on the transaction documentation. - **Derek Okonkwo** — Lead Associate. Derek will handle day-to-day deal management, due diligence coordination, and primary drafting of the SPA and ancillary documents. He will be your and Ted's primary day-to-day contact on the deal. - **Tiffany Rosenthal** — Working Associate. Tiffany will support Derek across all workstreams, with particular focus on due diligence memoranda, disclosure schedules, and closing deliverables. - **Sylvia Hartwell** — Specialist Partner, Tax. Sylvia will lead all tax structuring analysis, tax due diligence, and tax provisions in the transaction documents, including Section 338 election analysis, state tax implications, FIRPTA compliance, and tax indemnification. - **Howard Bellamy** — Specialist Partner, Antitrust & Competition. Howard will lead the HSR filing process and antitrust strategy, including engagement with the DOJ/FTC and coordination with outside antitrust counsel.
A note on antitrust counsel: given the competitive overlap between Cascade's CascadeDirect.com ecommerce platform and NovaMart's marketplace — both operating in the online specialty consumer goods space — I would recommend retaining Whitfield & Crane LLP, a Washington, D.C. antitrust boutique, as dedicated outside antitrust counsel to support Howard on the HSR filing and any subsequent regulatory review. Gabriela Montoya, a partner at Whitfield & Crane, has significant experience with DOJ merger reviews in the tech and retail sector and would be an excellent addition to the team. If you are amenable, I will send a separate introduction and engagement proposal.
As due diligence progresses, we may also bring in additional specialists from Calderwood & Harkness's other practice groups — IP, real estate, ERISA, and the like. I will confirm any additions with you in advance before incurring fees in those areas.
**Anticipated Work Plan and Timeline**
Based on our discussion with you and Ted, below is a preliminary roadmap for the transaction:
1. **Week of January 27**: Deliver preliminary deal structure memorandum evaluating stock purchase, asset purchase, and merger alternatives, with our recommendation. (Wexford, Okonkwo, with input from Hartwell on tax considerations.) 2. **Early February**: Prepare and negotiate a mutual NDA with NovaMart (to be executed before diligence materials are exchanged). Prepare and negotiate a non-binding Letter of Intent with NovaMart and its counsel. I understand Cascade's Board authorization to pursue the acquisition is expected in connection with the February 3, 2025 board meeting. 3. **Mid-to-Late February**: Upon LOI execution and Board authorization, launch comprehensive due diligence. Prepare and deliver a detailed due diligence request list to NovaMart and its advisors. Establish clean team and antitrust protocol for exchange of competitively sensitive information (Howard Bellamy to lead). 4. **March–April**: Conduct due diligence across all workstreams and prepare due diligence memoranda. Begin drafting the Stock Purchase Agreement and ancillary documents. Commence HSR pre-filing analysis and prepare the filing, targeting submission in April to allow adequate clearance runway before a summer/fall closing. 5. **April–May**: Finalize and negotiate the SPA with seller's counsel — which I understand will be Calloway, Brandt & Loewe LLP, led by Richard Calloway, out of Houston. Target SPA execution in May. 6. **May–September/October**: Post-signing, pre-closing period — HSR clearance process (including any Second Request response), third-party change of control consents, financing documentation, and employment agreements for key NovaMart personnel (Julian Reeves and Priya Narasimhan, among others), along with closing preparation. 7. **Target Closing**: October 2025 (subject to HSR clearance timeline).
This timeline is aggressive but achievable. The key gating item will be HSR and antitrust clearance given the competitive overlap in online marketplaces, which is why I believe early engagement of specialized antitrust counsel and a proactive approach to the filing process will be critical.
**Seller's Advisors**
For reference, NovaMart is represented by Calloway, Brandt & Loewe LLP (Richard Calloway, lead partner; Simone Adesanya, associate lead), out of Houston. NovaMart's investment bank is Pemberton Strauss Advisory LLC (Vivian Hong, Senior Managing Director). On Cascade's side, I understand Hargrove Mead & Co. (Christopher Dunleavy) is also engaged as investment bank, and we will coordinate closely with Chris's team throughout the process.
**NovaMart Background**
For context as we begin our work, NovaMart is a privately held Delaware corporation and one of the largest independent online marketplace platforms in the U.S. for specialty consumer goods. Key metrics include approximately $891 million in FY2024 revenue, $6.2 billion in GMV, approximately 62,400 active sellers, and 9.1 million registered buyers. NovaMart operates 14 fulfillment centers across 9 states through its proprietary logistics network, NovaShip. Principal stockholders include Ridgeline Equity Partners, LP (~41.2%), Brindoval Ventures Fund III, LP (~22.8%), and founders Julian Reeves (~18.5%) and Priya Narasimhan (~8.3%), with the balance held by management and employees (~9.2%).
**Accounting/Tax Advisor Coordination**
I understand Cascade has also engaged Whitmore & Paige LLP (Sandra Chiu, engagement partner) for accounting and tax due diligence. We will coordinate closely with Sandra's team, particularly through Sylvia Hartwell on the tax workstream, to ensure alignment and avoid duplication of effort.
**Next Steps**
To keep things moving, here are the immediate action items:
- Derek Okonkwo will circulate a draft mutual NDA for your review within the next few days. - Derek and I will prepare the preliminary deal structure memorandum for delivery by January 28. - Elena — please confirm whether I should proceed with the Whitfield & Crane LLP engagement for dedicated antitrust counsel (Gabriela Montoya). - Elena and Ted — if you could share any existing term sheets, financial models, or preliminary materials from Hargrove Mead regarding the NovaMart opportunity, that will allow the team to begin its review immediately. - I would like to schedule a brief kickoff call later this week with you, Ted, and Rajiv Sundaram to align on priorities and address any open questions. Please let me know your availability and I will have my assistant coordinate.
We are genuinely enthusiastic about this engagement and the strategic logic of the NovaMart acquisition for Cascade. This is a transformative transaction, and we are committed to delivering the level of focus and execution it deserves. The entire team is available at any time, and I look forward to working closely with you, Ted, and the broader Cascade team as we move forward.
Best regards,
Harrison Wexford Partner Calderwood & Harkness LLP 599 Lexington Avenue, 38th Floor New York, NY 10022 hwexford@calderwoodharkness.com