Blucora Inc.’s journey to acquire Dallas-based competitor 1st Global Inc. for $180 million took multiple twists and turns.
The tax-focused wealth management firm’s relatively new chief legal officer, Ann Bruder, quickly realized the transaction was not going to be simple.
Since Blucora and 1st Global were competitors, the deal teams needed to be small for fear of leaks to the news media. There were personality obstacles, as the co-founder of 1st Global was a former member of the management team at HD Vest, which Blucora purchased in 2015. The co-founder insisted on maintaining firm control over the sale of his life’s work.
“From a personality standpoint, it was challenging to persuade him to let his company be acquired by a firm that he had benchmarked himself against his entire career,” Bruder says.
The deal became even more challenging when a tricky regulatory issue arose during due diligence that could have materially influenced the valuation.
“It was a bit of a high-wire act,” Bruder recalls. “We had to convince the seller what the issue was worth and then demonstrate to our board that we had properly assessed the probable outcomes.”
Then another roadblock surfaced. The Financial Industry Regulatory Authority intervened, seeking the names of everyone with knowledge of the deal to confirm that there was no insider trading. The Federal Trade Commission and U.S. Justice Department also reviewed the transaction on possible antitrust concerns.
“Living in Japan initiated a lifelong love of travel and foreign languages.”
“Blucora had to persuade FTC and DOJ regulators to properly define the relevant market as wealth management firms and not tax-optimized wealth management firms, a narrower market subsector that would be likelier to yield anticompetitive concerns,” says Haynes and Boone partner Jan Sharry, who advised Blucora on the deal.
The DOJ and FTC came close to issuing a “second request” to Blucora – a demand that would have required a more time-consuming antitrust review, which could have killed the deal.
“Ann’s legal team again was able to surmount these regulatory hurdles and keep the deal moving forward,” Sharry says.
After 18 months of intense work guided by Bruder’s “steady hand,” Blucora finally closed the transaction in May 2019. As a result, Blucora’s wealth management business had about $67 billion in client assets at the end of 2019.
“By combining, we added significant scale, allowing us to take the best of breed across the platforms and provide better support and capabilities to our affiliated advisors and their end-clients,” Bruder says. “It was a bit complex to conclude given that the two firms had been competitors historically, as the No. 1 and No. 2 in the tax optimized niche of the broader broker-dealer market.”
For Bruder, the start of 2020 has been equally demanding, as Blucora acquired HK Financial Services in a stock purchase transaction in January and she has had to help deal with the departures of the company’s CEO and CFO.
Citing the complexity of the transaction, the Association of Corporate Counsel’s DFW Chapter and The Texas Lawbook named Bruder as a finalist for the 2019 DFW General Counsel of the Year for a Midsized Legal Department. The winners will be announced Thursday evening.
“As chief legal officer of a company that is quickly growing and evolving strategically, Ann has to wear many hats, serving not only as the company’s top lawyer but also as a senior executive who consults on a range of critical business functions, including board operations, human resources, governmental affairs, marketing, product development and more,” says Sharry, who nominated her for the award.
“She handles these responsibilities seamlessly, all the while maintaining a lean legal department with only six other lawyers and closely supervising outside counsel to ensure that they deliver cost-effective services,” Sharry says. “Ann’s performance over the past year captures her multifaceted skill set and demonstrates why she deserves to be honored as one of the area’s top general counsel.”
Born and raised in Wyoming, Bruder’s earliest dream was to be an astronaut. But in the third grade, she learned that astronauts must have 20/20 vision. She didn’t.
So, at age 8, she told her parents – her dad was an engineer by education and a rancher by profession, while her mom was a nurse – that she had decided to become a lawyer.
Bruder never lost focus.
In high school, she was selected to be Wyoming Senator Alan Simpson’s delegate on a U.S. Senate Exchange program to Japan.
“Living in Japan initiated a lifelong love of travel and foreign languages,” she says. “I did take refresher courses in Japanese after law school. Over the course of my career, I have done business in over 100 countries.”
She earned her law degree from Washington University in St. Louis in 1991, then spent five years in private practice handling complex commercial litigation matters. In 1998, she went in-house for six years in the legal department of American Airlines, then three years as the general counsel at CARBO Ceramics and seven years as the GC of Commercial Metals.
In June 2017, Blucora offered Bruder its chief legal officer job. The company had decided to relocate from Seattle to DFW, but most of the lawyers in its legal department had decided to stay on the West Coast. That meant Bruder had to rebuild the legal department from the ground up.
Bruder says Blucora’s mission drew her to take the job.
“We believe that the fusion of tax management and wealth management is the absolute key to better financial outcomes,” she says. “Taxes are one of life’s largest expenses, yet few wealth management firms focus on a client’s tax position, and many avoid tax implications altogether. Because we fuse tax management and wealth management, we are uniquely positioned to enable people to exceed their financial goal and, thus, live better lives.”
Bruder says her biggest successes during her 30 months with Blucora are her role in the development of the company’s board of directors and the strategic acquisitions of 1st Global and HK Financial Services.
At the same time, Bruder and her team have developed a sophisticated online and interactive billing system that allows the Blucora legal department to track matters its outside counsel are handling.
“It allows us to communicate about and manage matters real-time with our law firms,” she says. “It also provides an electronic initial review of bills, spots unauthorized rate increases, helps up track matters to their budgets. It is a very handy tool and pays for itself in savings annually.”
In the words of one of the Corporate Counsel Award judges, Bruder’s work during the first month of 2020 already qualifies her as a finalist for the award next year.