Question
From: (Redacted)
Sent: Wednesday, June 16,2010 2:26 PM
To: Verne, B. Michael[
Subject: HSR Analysis
Mike, I was wondering if you could seebelow and let me know your thoughts.
Many thanks in advance.
Description of Transaction:
1. Foreign issuer ("Buyer") will acquire fromU.S. entity ("Parent") (i) 100% of the noncorporate interests in thewholly-owned domestic subsidiary of Parent ("US Sub"), and (ii) 100%of the equity in 4 wholly-owned foreign subsidiaries of Parent (collective[y,the "Foreign Subs").
2. Purchase Price is app. $128.8mm, subject todeductions for payoff of Parent's debt/costs/expenses, less an amount equal tothe deemed value of app. 20.7% of o/s shares of Buyer (which shares shall bedelivered to Parent's UPE in lieu of cash value thereof at closing).
3. Acquired Person is the UPE of Parent, also a U.S. issuer. Acquiring Person is the UPE of Buyer, a foreign issuer.
Preliminary HSR Analysis:
1. 802.4 provides that the acquisition of votingsecurities of an issuer or noncorporate interests in an entity whose assets,together with those of a[[ entities it controls, consist or will consist ofassets whose acquisition is exempt pursuant to ...this part 802 .. .is exemptif the acquired issuer or unincorporated entity and all entities it controls donot hold non-exempt assets with an aggregate FMV of more than $63.4mm.
2. 802.50 provides that the acquisition of assetslocated outside of the US are exempt unless the foreign assets the AcquiringPerson would hold as a result of the transaction generated sales in or into theUS exceeding $63.4mm during the Acquired Person's most recent fiscal year.
3. Any assets of the Foreign Subs located outside of the US and which did not generate sales in or into the US exceeding $63.4mm duringthe most recent fiscal year can be deducted from the analysis pursuant to802.4.
4. After such deduction, the question becomes whether Parent, and allentities it controls, have remaining assets (for this analysis, we willassume they are not otherwise exempt under HSR -i.e. "non-exempt")with an aggregate FMV of more than $63.4mm. [f the answer is "no,"then no HSR filing should be required based upon 802.4 and 802.50.