Legal Blog

A Video Conversation with Jane Scaccetti, CEO of Drucker & Scaccetti- Part 6- Serving On Boards

Click Here for Part 1, Part 2, Part 3, Part 4, Part 5 Applying tactical accounting and tax planning expertise to support clients’ business strategies Jane Scaccetti is the CEO of Drucker & Scaccetti, P.C. (D&S), an accounting and tax advising firm headquartered in Philadelphia. For over 25 years, D&S has provided specialized financial consulting services to entrepreneurs as well as private and public corporations and family-owned businesses. The firm refers to its team members as Tax Warriors, emphasizing their discipline, tactical prowess, and passion for vigorously defending clients’ wealth and assets. A preeminent figure in her field, Jane is an accomplished executive, CPA, and community leader. She was the first woman to tax partner of any Big Eight firm in Philadelphia, and has sat on the boards and audit committees of organizations and businesses such as Temple University (where she also taught as a professor), Salus University, Penn National Gaming, Mathematica Policy Research, and The Pep Boys. She is also an influential member of Philadelphia’s 2016 DNC Host Committee and current host of Money Matters TV. Her numerous honors include the Take the Lead Award from the Girl Scouts of Eastern PA (2016), the Temple University Hospital Diamond Award (2014), the Philadelphia Business Journal Outstanding Directors Award (2013), and the PA Best 50 Women in Business Award (2006). Jane Scaccetti spoke with Don Foster, Chair of Offit Kurman’s Commercial Litigation Practice Group, for this interview. DON FOSTER: You spend much of your time serving on the boards of various public institutions and private companies. When did you first begin that role? What can you tell us about being on the boards of Pep Boys and Penn Gaming? JANE SCACCETTI: My board experience started many, many years ago with just me being active in the community, but over the years I’ve been very fortunate and I have had the opportunity to serve on public company boards. Pep Boys was a great opportunity for many years. During that time, for a small cap company headquartered in Philadelphia, it had at least three times been challenged—you could call it “attacked”—by activists to come onto the board. In two of those three instances, these activists were ones The New York Times had put on the “top five most active activists list.” Those kinds of things really do impact a company, and so when you’re on that board and you’re both dealing with the activist mentality, which is a little bit different, and dealing with management. You’re trying to give the kind of governance that the board wants to give to management in order to move the company forward, recognizing that you’re there as a representative of the shareholders—and other constituent groups in Pennsylvania, but mostly the shareholders. All of that was really challenging, and I learned so much. First of all, the board was composed of outstanding business people who had tremendous experience. We could learn from one another. It was an interesting board, and it changed over the years. I worked with two activists that I think had more of a short-term mentality, but I worked with one that was on the board for seven or eight years, who had a much longer view, which was the opposite of what everyone expected. And then when we had an opportunity. We knew that we needed to do something: pep Boys is a unique company because while it serves the after auto market, it also does retail. In other words, it will sell you the battery you can install and it does service: it will install the battery for you. That “do it for me” “do it yourself” attitude is not housed in one institution and any of the other businesses. If you think of Bridgestone, they’re service. If you think of AutoZone, they’re retail. So, at some point, we wanted to look at an opportunity to split the company, which is very hard to do. If you’ve ever been to a Pep Boys, they’re one big box—two sides. It’s not something you can put a wall on. So, as we started to do this, activists became active in the company and eventually we put the company into play and went in to look for strategic opportunities. We had a couple of good people come forward with some offers. We selected one, which was a $15-a-share in cash. A couple of weeks later the stock was trading above $15, which is unusual if you’ve just announced the sale for the company at $15, so you knew something was going on in the stock, but we didn’t know what. It turned out that Carl Icahn, who’d been involved in the company before that, asking about buying it and then saying he wasn’t interested, decided he was. That effectively started an auction for the company. So, over Christmas all the way up to New Year’s Eve, we had record number of board meetings and calls, working with the bankers and doing the due diligence we needed to do. And then understanding it—they’re not super complex deals, but they’re complex enough. They’re not simple. That was pretty exciting. The company did close a little while ago, so it’s now private. That was a great opportunity for me. There was a $35 million breakup fee, which meant that at one point Carl Icahn had bid $13.50, and we thought, “okay,” went back and said, “we’ve priced offers higher—are you interested?” He said, “I’ll call you back,” called back, and said, “no, I’m good.” We said fine, so we moved forward. When we moved forward there was a $35 million breakup fee—and everything I’m telling you is public document—but that breakup fee amounted to about 62 cents per share. Whoever came back in, if they offered $15.50, they were really offering $15.50 plus 62 cents, so you were really at $16.12. There was always that piece, and then when Icahn came back a second time to counter on something from Bridgestone, he basically said, “the price will be a breakup fee of $35 plus $35. I want to be reimbursed if someone comes in and tops my offer, and I’ve just paid $35 to Bridgestone so I need another $35.” It was all fascinating. To watch that mindset, I remember all of us went, “wow, that makes sense.” For a moment I said “wait, I understand that.” Penn Gaming is just a totally different experience for me. My experience in the casino world was maybe taking my mom to play slots, not something I necessarily had a background in, but I did have a background in retail, and I did have a background in brands and because I’m considered a financial expert under the SCC. They were looking for an audit chair, and so I went on the Penn Gaming board and that’s been a real eye-opener for me. I’m learning a lot and I’m enjoying it, and there are a great group of talented executives—some of the best talent that I’ve ever worked with—so I am enjoying that, too.  


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