LA confidential: What’s a Hollywood producer doing on the board of NSO's parent company?
LA confidential: What’s a Hollywood producer doing on the board of NSO's parent company?
Calcalist has learned that Hollywood producer Robert Simonds is listed as one of the two directors, along with Omri Lavie, at Dufresne Holding, NSO’s parent company. What’s the movie mogul’s motive?
Robert Simonds, a Hollywood producer with ties to China, recently began serving as a director in the holding company that owns all the shares of the Israeli spyware developer NSO, Calcalist has learned. Simonds is one of the only two directors in the holding company, Dufresne Holding, alongside Omri Lavie, the founder of NSO who also owns all the shares of the holding company. As far as is known, Simonds has no practical or business experience related to NSO's fields of activity, but in addition to his production company, he has served as a director in several companies and entities in different fields of activity.
Until the beginning of 2023, NSO was owned by a group of investors, who acquired control of the company from the Francisco Partners fund in 2019 in a joint transaction with the founders, Shalev Hulio and Omri Lavie. The controlling owners were represented by an American company called BRG Novalpina. Another interested party in NSO is a syndicate of lenders (which includes Credit Suisse, Senator Investment Group, and Birch Grove Capital), which loaned the company half a billion dollars as part of the procedures to buy back shares from the Francisco Partners fund. This debt created a significant financial burden on NSO, especially after it was blacklisted by the US Department of Commerce in 2021.
Throughout 2022 and early 2023, BRG and NSO management conducted a series of public legal conflicts surrounding control of the company and the activities of its subsidiaries. The latest dispute between them, which was brought to the District Court in Tel Aviv, dealt with the directors appointed by BRG, and according to Hulio and Lavie, due to a different legal dispute taking place in Luxembourg, the appointment of these directors is invalid and they have no authority to give instructions to the management of NSO.
This legal dispute came to a surprising end in February of this year, when Hulio, Lavie, and the syndicate of lenders transferred all the company's shares to a new holding company, Dufresne Holding, which is registered in Luxembourg (previously, the shares of the NSO group were held by another Luxembourg company called NorthPole). At the time of the announcement, Lavie was listed as the sole shareholder and sole director of Dufresne Holding, when according to the announcement delivered to the court, a "new investor group" is expected to enter the picture.
Simonds was born in 1962 in Phoenix and is a graduate of Yale University. His main occupation is in the entertainment industry, and starting in 1990 he worked as an independent producer in Hollywood, producing, among other things, films by Adam Sandler (The Wedding Singer, Big Daddy and others) and Reese Witherspoon. The 30 films he produced during this period registered box office sales of $6 billion.
In 2012, Simonds founded an independent production company called STX Entertainment, with investments that came from the likes of the TPG Growth fund, the billionaire and producer Gigi Pritzker, and the Chinese investment fund Hony Capital, which is controlled by the holding company Legend Holdings, the parent company of Lenovo. In 2016, STX added additional investors, including the Chinese technology giant Tencent and the Hong Kong telecom company PCCW. In 2019, TPG and Hony led another funding round in STX, totaling $700 million. STX planned to go public on the Hong Kong Stock Exchange in 2018 at a value of $3.5 billion, but in the end these plans did not come to fruition.
As a production company, STX focused on low-budget films (in Hollywood terms). The cost of most of its productions ranges from $5 million to $20 million per film, almost always in co-production with other parties. These films usually generated box office revenues of several tens of millions of dollars, but a significant number of films also brought in less than $10 million, with ticket sales not covering production costs.
In April 2020, against the background of STX's lukewarm success at best, Simonds worked to merge with the Indian production company Eros International. A year earlier, a press release raised suspicions of financial irregularities in Eros, for example $153 million that was transferred to a production company whose address is registered in a slum in Mumbai and which was headed by the brother-in-law of the CEO of Eros.
The union between STX and Eros did not last long, and last year the investment company Najafi Companies of the American billionaire of Iranian origin Jahm Najafi, purchased STX from Eros in a deal worth $173 million that gave it 85% of the shares of the split company (Eros owns the remaining 15%) - a significantly lower amount than the many funds invested in the company in previous years and which represents a significant business failure. As far as is known, even after all the incarnations that STX went through, Simonds continues to be involved in its activities and he currently serves as the company's chairman.
In addition to his activities in the field of entertainment, Simonds served as a director in several other entities. Simonds' family owns water rights in Arizona, and he served from 2004 to 2006 on the board of the Metropolitan Water District of Southern California, the world's largest water wholesaler, where he represented the city of Los Angeles.
In 2010, Simonds was appointed director of Heckmann Corporation, a public corporation that created and built companies and ventures in the field of transporting and handling liquids and other materials. In 2013, the corporation changed its name to Nuverra Environmental Solutions, and last year the company was acquired by Select Energy Services in a deal worth $45 million. As of today, Simonds no longer serves as a director.
Simonds also served on the board of the Yale School of Management and the California Chamber of Commerce, was a member of the advisory board of the Center for Global Risk and Security of the major research institute RAND Corporation, and one of the governors of the Natural History Museum of Los Angeles County.
Simonds was also involved in a #metoo mini-scandal. In January 2018, it was reported that the president of STX, Sophie Watts, left the company after she complained of harassment by Simonds, who was the CEO at the time. Two sources with knowledge of the matter described the behavior of Simonds, a married father of five, towards Watts as "obsessive." STX said in response that the report was "inaccurate in many aspects."
Simmonds could not be reached for comment. NSO did not respond to the report.
