Question
From: (redacted)
Sent: Monday, May 04, 2009 11:41 AM
To: Verne, B. Michael
Subject: HSR Questions
Mike -To confirm our conversation on May 1regarding the consolidation about which I previously emailed you (email sent4/17/2009) I understand the consolidation of companies A, B, C and D will beviewed as a series of mergers. Company A is the largest company, with annualnet sales or total assets in excess of $130.3 million; each of companies B, Cand D has annual net sales or total assets in excess of $13 million.Accordingly, the size-of-the-parties test will be met. To determine whether theconsolidation meets the size-of-the-transaction test, you indicated we shoulddetermine the value of 100% of the membership interests of company B (companyA's stock does not need to be valued). If that value exceeds $65.2 million,then a filing would need to be made in which company A is both an acquired andan acquiring person, and company B is both an acquired and an acquiring person.likewise, we also would need to value the acquisition of company Cs assetsand company D's assets. If the value of either transaction exceeds $65.2million, then a filing would need to be made for each such transactionexceeding the threshold, with company A filing as both an acquired and anacquiring person, and company C and/or company D filing as both an acquired andan acquiring person. The newly-created entity, Newco, would not need to file aseither an acquired or an acquiring person. While multiple filings may berequired, pursuant to Section 803.9(b) of the Rules, we understand only onefiling fee is required.
In addition, in valuing the secondary acquisitions(acquisitions of Newco stock), we understand that if such stock is ultimatelydistributed to the shareholders or members, as the case may be, of companies A,B, C and D, regardless of whether company A, B, C or D momentarily holds suchstock, that for HSR purposes, we can view the shareholders or members as theacquiring person for HSR purposes.
Please let me know if I have correctly applied theHSR Rules to the facts here. Thanks for your continued assistance.