Question
April 4, 2006
VIA FEDERAL EXPRESS
NancyM. Ovuka, Esq.
Staff Attorney
Premerger NotificationOffice
Bureau of Competition
Federal Trade Commission
6th Street and Pennsylvania Avenue, N.W.
Washington, DC 20580
Re: AmericanSecurities Partners IV, L.P. Dear Ms. Ovuka:
Thank you for taking my call last week. We arecounsel for (redacted) (the "Fund"), a limited partnership formedunder the laws of Delaware. The Fund was formed on (redacted) and has publishedunaudited financial statements for the year ended December 31, 2005 (a copy isattached for your convenience).
An affiliate of the Fund has recently executed aStock Purchase Agreement dated April 2, 2006, whereby it is contemplated thatthe Fund will purchase 100% of the voting securities of (redacted). Thetransaction has an enterprise value of approximately $210 million. It is ourunderstanding that the ultimate parent entity of (redacted) has total assets orrevenue in excess of $113.4 million.
It is our understanding pursuant to Rule 801.11(c)(2)1of the rules promulgated under the Hart-Scott Rodino Antitrust Improvements Actof 1976, as amended, that the total assets of a person shall be as stated ontheir last regularly prepared balance sheet. The Fund's balance sheet for theyear ending December 31, 2005 indicates total assets of approximately $9.4 millionand annual revenue for calendar year 2005 of less than $1 million. The Fund'snext regularly prepared balance sheet will be published for the period ending March 31, 2006 andis anticipated to show total assets of less than $11.3 million. The March 31, 2006balance sheet will be the most recent balance sheet of the Fund prepared priorto the closing of the transaction.
The Fund's limited partners have agreed to fund aportion of their commitments to the Fund shortly before the closing of the(redacted) acquisition. The amount of capital that the Fund will receive,approximately $95.5 million, will be used to purchase the equity of the Targetand pay expenses of the transaction. The balance of the purchase price willcome from a debt financing that an acquisition vehicle organized by the Fundwill consummate.
It is our understanding of Rule 801.11(c) thatalthough the Fund will receive additional capital as described above prior toclosing of the transaction, the Fund's most recently prepared balance sheet inexistence prior to the closing of the transaction is the balance sheet used inorder to determine compliance with the size of the persons test.
The facts of our transaction indicate that a filingwill not be required under the Act if the Fund's most regularly preparedbalance sheet in existence prior to the closing will indicate the Fund does notmeet the size of the persons test.
(Redacted)and the undersigned may be contacting later this week to verify that thePremerger Notification Office agrees with the position stated herein.
1. 16 C.F.R. 801.11(c)(2).