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Business Observer Friday, May 7, 2004 18 years ago

Capital Guy

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At 37, Trenam Kemker's Nelson T. Castellano is one of the area's top lawyers in complexbusiness transactions.

Capital Guy

At 37, Trenam Kemker's Nelson T. Castellano is one of the area's top lawyers in complex

business transactions.

By David R. Corder

Associate Editor

Nelson T. Castellano and J. Carey Ross Jr. spent about seven months undoing what Richard Leisner and Castellano helped create years ago. Castellano and Ross last month helped transform publicly traded JLM Industries Inc. into a privately owned company. Seven years earlier Leisner and Castellano represented the Tampa-based chemicals distributor and plastics manufacturer in its $23 million initial public offering.

Those two deals illustrate the continuing faith that JLM has in these partners from Tampa's Trenam Kemker Scharf Barkin Frye O'Neill & Mullis PA - a 34-year-old law firm with a rich culture steeped in teamwork. Yet these deals also tell a lot about Castellano's increasing prominence as one of the firm's top rainmakers. At 37, he is co-chairman of the firm's business transactions group.

It's Trenam Kemker's culture of teamwork that causes Hal Mullis, the law firm's president, to pause when asked to describe Castellano's contributions since joining the firm 12 years ago right after law school. His voice hints at the pride he has for Castellano and his work. But he's hesitant to single out Castellano for recognition from a crop of young attorneys the firm recruited around the same time.

"There are about five or six young partners in the firm who represent the firm's future," Mullis says. "Nelson is certainly one of those. We had a very good year or two when we managed to capture all of that talent and enthusiasm."

Castellano shares that modesty, saying: "I'm not here without the efforts of the firm and the other partners. That's what distinguishes Trenam Kemker from other law firms." His co-chair is Gary Teblum, a senior member of the firm.

Not typical

By recruiting Castellano, however, the law firm gained one of those intangible qualities. Castellano has a fascination with the underpinnings of business.

"He's a lot more business-oriented than most attorneys," says JLM general counsel Ford Pearson. "He also fosters and keeps relationships better than most. He doesn't come across as the typically dry attorney."

Credit his father and mentor, Tampa physician Nelson D. Castellano, for the foundation that produced such a business interest, he says, adding, "My father first instilled in me the work ethic, taking pride and doing the best I can."

Castellano earned a bachelor's degree in finance at Florida State University. But he struggled with the decision whether to pursue a master's degree in business administration or a career in law. He decided on a legal career, earning a law degree in 1991 from the University of Florida College of Law.

While studying law, Castellano spent his summers working as a Trenam Kemker law clerk. He liked the work and enjoyed the atmosphere. The firm reciprocated in 1992 by hiring him as an associate.

Right away, the law firm immersed Castellano in the finer points of transactional work by assigning him to the Discount Auto Parts Inc. IPO. "Law school doesn't prepare you for that process," acknowledges Castellano, who attributes his true education to partners such as Leisner.

Then Castellano and the law firm took a ride on a wave of transactions that didn't slow until the late 1990s. From 1992-98, for instance, Castellano says he worked on 10 IPOs or secondary stock offerings.

After Discount Auto, Castellano worked on Chicos FAS Inc.'s IPO. Then he worked on a secondary offering for the women's clothing retailer.

By the mid-'90s, the law firm assigned him to his first big project: handling the day-to-day responsibilities as underwriter's counsel in the IPO of Louisiana-based Campo Electronics Appliances & Computers Inc.

Market swings

With five years experience under his belt, the law firm then assigned him his biggest assignment: the JLM IPO. Two years later his cumulative production earned him a promotion to law firm partner.

Just as he completed JLM IPO, however, the national market shrugged, creating a period of prosperity known as the dot-come heyday. It was a market dominated by hordes of early-stage technology companies that attracted significant capital.

But this market swing had a downside for Tampa Bay area transactional lawyers such as Castellano. Much of the technology growth and financing took place in other markets such as California, leaving little work locally.

"Most of the work moved out of the area," Castellano recalls. "All of that business shipped out to the West Coast."

To fill the void, Castellano and his partners turned their focus to the private equity markets. "There was a flurry of activity," he says.

Then the market shrugged again. Only this time, the highly leveraged technology companies throughout the nation faltered by the scores, leaving investors holding worthless stock.

As the market recessed, however, Castellano and the law firm made a strategic decision to push harder into the private equity markets. They scored a solid victory amid the aftermath of the dot-com bust and right after the turbulent days of 9/11. Tampa-based Iliant Corp., a growth-stage technology company that offers business services to physicians across the Internet, retained him and the firm to oversee a $10 million venture capital deal.

Even amid the soft economy, Castellano through his business contacts produced more work for the firm. Iliant officials asked him and firm last year to oversee a second round of venture financing valued at about $4 million. Also last year, Tampa-based Gold Standard Multimedia retained him and the firm to oversee a $3 million venture capital deal.

Because of his success with private placements, Castellano urged the law firm to increase its focus on transactional work. "We've been extremely busy," he says. "A year and half ago we decided to grow the business transaction group, adding three new associates, one paralegal, with plans to hire another (paralegal). I think we can add a number of additional associates over the next 18 to 24 months."

Biggest challenge

Amid the flurry of private placement activity, Castellano and the law firm also took on what he considers as one of his most challenging deals - the merger of Tampa-based Ameristeel Corp. with Canadian-based Co-Steel.

Castellano spent from six to nine months on the deal that created Gerdau Ameristeel Corp., a company that trades on the Toronto Stock Exchange and produced nearly $2 billion in net sales as of the year ended Dec. 31.

Much of that challenge came because of the myriad international legal issues. For one, Gerdau SA, Ameristeel's largest shareholder, is Brazilian based. Then there were issues with moving Ameristeel off the U.S. stock markets and putting Gerdau Ameristeel on the Canadian markets.

When asked to summarize his ability to succeed even amid a soft market, Castellano says this: "It's all about developing a long-term relationship," he says. "It's nice to see the growth that is brought about by working with a company. There is a positive result to the things we do for both parties. It's a win-win situation."

JLM's Pearson can attest to that. "Nelson fosters business relationships more like a friendship," he says. Adding in jest, "That is if you can get along with him. But he's pretty easy to get along with."

And Pearson says Castellano knows when to wield his business acumen. For instance, he says Castellano understands the need for flexibility in a deal.

"He can very easily look at a company and see its financial situation and mold (his legal) fee based on the company's situation," Pearson says. "He'll give you a discount or take pieces of work that were done and not bill for it. He's an honest guy."

"(Castellano's) always enjoyed doing business with JLM because he's said he thinks (the company) presents a pretty good story to the street," Pearson adds. "You want an attorney who is slightly impressed with the business organization you're with."

That's not just Pearson's belief, either. Tampa businessman Allan Mezrah says Castellano presents no artificial facade. He should know. The two have known each since high school and attended college together for a while.

"He's down-to-earth, honest and hard-working," Mezrah says. "He's like a patron saint, because he never does anything wrong. All of his friends bounce questions off Nelson because they know he'll give the correct answer. You won't get any fluff."

Because of such trust, Mezrah relies on his friend to handle much of his company's legal work. He owns Fone Connection of Tampa Bay Inc., which operates about 1,000 payphones across the state, and The Cash Connection, an operator of automatic teller machines.

"In fact, I called him (May 4), because we're going to sell some stuff," Mezrah says. "Nelson was the first person I thought of. He's done for our company any type of sale or transaction we do. He's the one we would entrust the knowledge to ensure nothing (negative) happens. It's fun doing business with people you trust and know."

Nelson T. Castellano

Hometown: Tampa. Graduate of Jesuit High School.

Personal: Married 10 years to Celeste. The couple has three children: Tonnar, 8, Rebecca, 6, and Ella, 20 months.

Education: Bachelor's in finance, 1988, Florida State University; law degree, 1991, University of Florida College of Law.

Favorite place in the Tampa Bay area: St. Pete Beach

Favorite place to eat: Oyster Catcher

Last book read for relaxation: "Eragon: Inheritance Book One," by Christopher Paolini, who wrote the book at age 15. Castellano reads it with his son, Tonnar.

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