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Rule(s): |
801.10 |
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Staff: |
Michael Verne |
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Response / Comments: |
03/02/2011 - Will the 30 year lease term exhaust the useful life of the underlying assets? If so, it would be considered an installment purchase and the lease payments would be aggregated. |
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From: |
(Redacted) |
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Sent: |
Wednesday, March 02, 2011 4:07 PM |
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To: |
Verne, B. Michael |
Subject: HSR question
Mike,
Our client plans to buy mining assets for $50 million. At the time of the purchase, buyer will also enter into a 30-year lease for real estate on whicl1 quarrying operations are located. The lease payments will be approximately $700,000 per year. I am trying to understand whether the lease payments should be aggregated with the purchase price for purposes of calculating whether the transaction clears the $66 million size-of-transaction threshold. Any thoughts?