Question
From:(redacted)
Sent:Tuesday, January 23, 2007 8:27 AM
To:Verne, B. Michael
Cc:(redacted)
Subject:Questions about UPE when deal structure may change
Mike
These are the questions that Chris Bergin and Iwanted to as you. The deal involves an investment bank that is buying companiesthrough a group of different funds that are raising money in different markets(US, Canadian, foreign). The purchase will actually be made through anacquisition vehicle.
1. There is some uncertainty about the UPE. This is a deal where severalinvestment funds are raising money to fund an acquisition through anacquisition vehicle. The UPE may be the acquisition vehicle itself OR(depending on how much money the individual funds may raise), it may be one ormore of the investment funds driving the transaction. If we file for ainvestment fund, and it turns out that the acquisition vehicle is only the UPE,what do we do? (This could happen if four investment funds raise an equalamount of money, so that no on controls the acquisition vehicle.)
2. Do we amend the filing to substitute the lower entity(the acquisition vehicle)?
3. If so, do we need to pay another fee where we aresubstituting one UPE for another?
4. If we amend, what happens to the waiting period?
5. If, instead of merely substituting one UPE for another, what happens ifwe have to substitute three investment funds. Since they are all. their own UPEs,we assume they will have to file and pay separately. Does that mean that thewaiting starts to run all over again?
6. Size of Person test. The UPE will have no assets (except cash or cashcommitments) at the time of filing, but it is almost certain to have assetsthrough other deals when this transaction closes. What do we do about that? Atthe time of filing, the UPE technically will not even meet the size of persontest so it shouldn't be making a filing. But it will meet the size of person testat closing.
7. Finally, financial data related to acquired companies. At time offiling, the UPE will not have any revenue information because it won't have anyassets. But it will at closing, assuming that some other transactions closebefore this one. We have a sense that the parties are trying to close on alldeals as fast as possible, but we can't predict what other closings areactually going to conclude before this one. On the other hand, if we file,based only on current assets (zero), aren't we giving a misleading picture?