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Merit Investment Bank Advises Herco Inc. in Its Sale to Quality Gold

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Merit Investment Bank & Co., a leading middle-market investment bank, is honored to have served as exclusive advisor to Herco Inc. in its sale to Quality Gold.

Headquartered in San Francisco, Herco Inc. is a leading wholesaler of fine jewelry, specializing in 14-karat, 18-karat and platinum designs. Founded by Reuven and Zehava Itelman in 1979, Herco has grown to serve over 3,000 customers across the United States and carries over 1,600 SKUs.

Joe Durnford, chairman of Merit Investment Bank & Co., said, “We were honored to work with the Itelman family to create liquidity for Reuven and Zehava while simultaneously positioning the Herco brand for a long legacy in the marketplace. Reuven has spent more than 40 years building a brand that is synonymous with quality and customer service, and we congratulate him on a well-earned retirement.”

Quality Gold, a leading vertically integrated specialty logistics and jewelry distributor, announced in late December that it would be acquired via SPAC by Tastemaker Acquisition Corp. (Nasdaq: TMKR). The strategic acquisition of Herco complements Quality Gold’s product suite and expands its distribution network.

Reuven Itelman, founder of Herco, added, “We are grateful to Joe and Sean for their efforts and guidance throughout this process. After 43 years in the jewelry business, I knew my business but didn’t know how to exit it. We simply would not have gotten to this point without their partnership. My wife and I are grateful to the customers and suppliers we’ve had over the years, and we are excited for a long retirement and time with family.”

Legal advisory was provided by George Buffington of Buffington & Aaron.

About Herco Inc.

Established in 1979, Herco is a wholesaler of and procurement specialist in gold, platinum, titanium, palladium, and gemstone jewelry, selling to boutique and omnichannel retailers across North America. The company has built a decades long reputation for quality, expert craftsmanship and product longevity.

About Merit Investment Bank

About Merit Investment Bank & Co. is a leading boutique investment bank focused on serving middle-market companies. Merit Investment Bank & Co. executes sell-side M&A, buy-side M&A, and capital advisory services with specific emphasis on the technology, software, consumer, business services, and manufacturing sectors. In addition, Merit Investment Bank & Co. offers other investment banking services such as debt and equity capital raises, restructuring advisory services, business valuations, and project financing through its subsidiary, Merit Investment Bank Securities, member FINRA / SIPC, a full-service Broker-Dealer licensed in 50 states.

1. Immediate Post-Closing Actions

  • Confirm Closing Deliverables: Verify wire transfers, escrow deposits, and payoff letters. Ensure all signed documents are stored and circulated appropriately.
  • Communications: Issue press releases and internal announcements. Host internal debriefs to clarify deal implications and next steps. Share FAQs to address employee and client concerns.

2. Financial & Tax Considerations

  • Tax Planning: Review capital gains implications and possible elections (e.g., 338(h)(10)). Optimize allocation of proceeds among trusts, estates, and investment vehicles.
  • Wealth Management: Establish an investment strategy for sale proceeds, factoring in liquidity, diversification, and risk tolerance. Revisit estate and philanthropic plans.

3. Operational Transition

  • Integration Roadmap: Define Day 1, Day 30, and Day 100 milestones. Align IT systems, compliance, and reporting frameworks.
  • Governance & Management: Clarify new reporting lines, identify key management for retention, and set up transition service agreements where necessary.

4. Employee Retention & Culture Integration

  • Retention Programs: Offer stay bonuses or performance incentives to key employees.
  • Culture Alignment: Host integration workshops to harmonize values and workflows between merging organizations. Use pulse surveys to monitor morale and engagement.

5. Customer & Partner Management

  • Customer Retention: Conduct proactive outreach to major clients to reassure them about service continuity. Offer transition incentives if needed.
  • Supplier & Partner Relations: Reaffirm contracts, introduce new leadership, and mitigate potential disruptions in the supply chain.

6. Legal & Compliance

  • Ongoing Obligations: Track escrow releases, earnouts, and indemnification timelines. Update registrations, licenses, and insurance policies.
  • Dispute Preparedness: Maintain a documentation log and standardized process for handling any post-closing disputes.

7. Long-Term Strategic Planning

  • For Sellers: Outline reinvestment strategies—whether in new ventures, passive investments, or philanthropic initiatives.
  • For Buyers: Execute synergy realization plans and monitor KPIs to measure integration success. Refine strategy as market conditions evolve.

8. Key Deliverables for Merit Investment Bank

  1. Post-Sale Communication Playbook – For employees, customers, and press.
  2. Tax & Wealth Planning Roadmap – Personalized for sellers.
  3. Integration Milestones Tracker – With Day 1/30/100 progress indicators.
  4. Retention & Culture Alignment Plan – Ensuring people continuity.
  5. Escrow & Earnout Monitoring Checklist – For legal and financial oversight.

Merit Investment Bank as a leading boutique investment bank is focused on entrepreneurial middle-market companies. Merit Investment Bank Executes sell-side M&A, buy-side M&A, and capital advisory services, debt and equity capital raises, corporate finance, and valuation services.

Securities offered through Finalis Securities LLC Member FINRA/SIPC. Merit Investment Bank and Finalis Securities LLC are separate, unaffiliated entities.

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