The dream of every attorney specializing in the capital market is to cover an anonymous startup, from inception up to the public issuance stage. He can then cut a generous coupon at a value that may even equal his income for dozens of years.
Naschitz, Brandes are one of the lucky few who have realized that dream. And, exclusive responsibility rests with Israel’s CheckPoint, one of the major successes on Wall Street in the last two years. Naschitz, Brandes served as legal advisor to the company, which has been developing information security software on communications networks since ’95. At that time, there were many in Israel who were not familiar with the Israeli startup, which today is a world leader in information security.
Beyond the regular legal fees the office received for its legal advice, CheckPoint owners showed unanticipated generosity towards its legal advisors, and agreed to allot them options, which it now becomes clear, are worth close to $25 million.
Checkpoint allotted Naschitz, Brandes options to purchase 742,000 shares, representing 2% of company equity. Checkpoint trades today at a company value of $1.4 billion, and the options held by the attorneys, most of which have been exercised, afforded huge profits.
Most of the options allotted Naschitz, Brandes at the end of ’95 called for the minuscule exercise price of $1.69 (the price of CheckPoint’s share today is $38). Due to share performance in the period between its two issues, 20% of the options were set at a higher price of $14.
Naschitz, Brandes exercised the major part of its options (544,000) during CheckPoint’s second issuance, in April ’97.
Published by Israel's Business Arena February 12, 1998