Question
(redacted)
August 28, 1985
Premerger Notification Office
Bureau of Competition
Federal Trade Commission
Washington, D.C. 20580 Express Mail
Attention: Patrick Sharpe
Dear Mr. Sharpe:
This letter will confirm our telephone conversation yesterday, with respect to an exemption from filing the Hart-Scott-Rodino Notification and Report Form under Section 802.20 of the Regulations, entitled Minimum Dollar Value. The proposed transaction is an agreement between a corporation (the acquiring person) and the shareholders of B Corporation, pursuant to which the acquiring person will acquire all of the outstanding voting securities of B Corporation for a purchase price of approximately $12,500,000. B Corporation has annual net sales for its last fiscal year of less than $25,000,000. The Company lists on its recent balance sheet assets of slightly under $18,000,000 and liabilities of slightly in excess of $16,000,000.
First, it is our understanding that , because the transaction is an acquisition of voting securities, Section 802.20(a) with respect to assets of B Corporation is irrelevant.
Second, it is our understanding that one does not aggregate the liabilities and the purchase price to determine total assets under Section 802.20(b). There fore, even though liabilities plus purchase price exceed $25,000,000, B Corporation will not necessarily be deemed to have total assets in excess thereof for purposes of Section 802.20(b).
Should you disagree with this analysis, please let us know.
Very truly yours,
(redacted)
(redacted)
STAFF COMMENTS: I concur, Patrick 9-3-85.
Called 9-5-85 (redacted) to tell him I concur.