Question
From:(redacted)
Sent:Tuesday, May 23, 2006 11:50 AM
To:Ferkingstad, James H.
Subject:FW: HSR Size of the Party Test Follow Up
James-- below is the email I mistakenly sent to the wrong email address --apologies. If you could review and let me know today it would be muchappreciated. Best regards.
----OriginalMessage-------
From: (redacted)
Sent: Monday, May 22, 2006 8:31 PM
To: 'jfirkingstad@ftc.gov'
Subject:HSR Size of the Party Test Follow Up
James -- in follow up toour telephonic conversation today regarding a client of ours who is contemplatingan acquisition of assets I wanted to confirm in writing the facts and ourconclusion below.
Our client is an acquisitionvehicle that will be either a corporation or a partnership (LLC) and currentlyhas no assets (the "Acquiror"). The shareholders/members of theAcquiror will contribute $135MM in cash plus some additional cash fortransaction expenses in order to effect an acquisition of assets from a sellingparty (the "Seller"). None of the shareholders/members of theAcquiror will have a right to 50% or more of the profits or assets of theAcquiror upon dissolution or otherwise, or the right to appoint 50% or more ofthe board of directors/managers of the Acquiror. The shareholders/members ofthe Acquiror are advised and managed by a common investment advisor.
The Acquiror will usesubstantially all of the cash contributed to it to purchase the assets from theSeller and to pay transaction expenses.
In our phone conversationyou concurred with our conclusions, based on the above stated facts, that (1)the Acquiror is its own ultimate parent entity, (2) because substantially allcontributed cash from its shareholders/members will be used for the purchase ofthe assets from the Seller and for transaction expenses, and given that theAcquiror has no other assets, the Acquiror does not satisfy the $10MM size ofthe person test for a $135MM transaction, and (3) therefore no filing under HSRis necessary for this transaction.