Yes, since the cash that remains will be consideration for the sellers, it should be included in the size of transaction.
Question
From: Shaffer, Kristin <kshaffer@ftc.gov>
Sent: Tuesday, December 21, 2021 2:27:40 PM (UTC-05:00) Eastern Time (US & Canada)
To: [Redacted]
Cc: HSRHelp <HSRHelp@ftc.gov>
Subject: RE: Question Regarding Determining the Size of Transaction
[Redacted]
Yes, since the cash that remains will be consideration for the sellers, it should be included in the size of transaction.
Best regards,
Kristin
Kristin Shaffer
Attorney
Premerger Notification Office
Federal Trade Commission
202-326-2388 | kshaffer@ftc.gov
From: [Redacted]
Sent: Tuesday, December 21, 2021 1:11 PM
To: HSRHelp <HSRHelp@ftc.gov>
Subject: Question Regarding Determining the Size of Transaction
We are working on a transaction targeted to occur sometime during Q1 of 2022. The expected structure of the transactions is as follows: Company A will purchase all of the non-corporate interest of Company B on a cash free/debt free basis. The cash held by Company B prior to the transaction will remain in Company B after the transaction but the amount of such cash will increase the net proceeds to the selling company. We understand that for asset purchases, pursuant to Rule 801.21, “[c]ash shall not be considered an asset of the person from which it is acquired.” However, we have the following question:
For an acquisition of non-corporate interests, in determining whether the size of transaction threshold is met, should the cash that remains in Company B (the acquired company) resulting in an increase in closing proceeds to be disbursed to the seller at closing be included in the acquisition price?
All the best.