Question
(redacted)
July 28, 1989
CERTIFIED MAIL RETURN RECEIPT REQUESTED
Premerger Notification Office
Bureau of Competition
Federal Trade Commission
6th & Pennsylvania Avenue, NW
Room 303
Washington, D.C. 20580
Attn:Mr. Victor Cohen
Re:(redacted)
Dear Mr. Cohen:
I am writing to confirm a conversation which we had on July 18, 1989 about whether notification was required pursuant to the Premerger Notification Rules (the Rules) in connection with a transaction proposed by one of our clients.
The facts as I relayed them to you over the phone are as follows:
A corporation (the Acquiror) having approximately $4,000,000 in assets and $8,000,000 in sales intends to acquire the assets of a division of a $100,000,000 company. The division being acquired has assets of $21,000,000 and sales of $25,000,000. The Acquiror is financing the acquisition with approximately $5,000,000 in new subordinated debt, $5,000,000 in new voting security equity and $10,000,000 of new senior debt. After the financing is in place, each of the three new unrelated equity investors will hold approximately 20% of the outstanding voting securities of the Acquiror and the existing equity owners will hold the remaining a40% of the Acquirors common stock.
It is my understanding that in our conversation you confirmed to me that notification under the Rules would not be required in connection with the proposed transaction because the Acquiror failed to meet the $10,000,000 threshold of the size of the partys test. You also confirmed my understanding that the $20,000,000 in debt and equity financing which the Acquiror obtained in connection with the transaction would not cause an increase in the value of the Acquirors assets above the $10,000,000 threshold.
If my understanding of our conversation and of the responsibilities of the Acquiror under the Rules is inaccurate, please contact me..
I greatly appreciated you assistance during our phone conversation and I am grateful for your continued attention to this matter.
Very truly yours,
(Redacted)
(Redacted)
cc:(redacted)
(redacted)