0410010 Informal Interpretation

us-ftc-hsr-informal-interpretations-b8ec02e21e58f5c20d7e6e17c9aae67c0410010 Informal InterpretationGuidance

Date
Rule
801.10
Staff
Michael Verne
Response/Comments
Do not include $9MM payoff of Debt.

Question

From: (redacted)
Sent: Wednesday, October 20, 2004 11:47 AM
To: Verne, B. Michael
Subject: HSRQuestion on Valuation

Mike, Following up my voice mailof this morning, I have the following transaction:

1 Purchase of non-publicly tradedvoting securities, where the UPE is an individual controlling shareholder whomeets the size of person test.

2. Agreed purchase price for thevoting securities is $45 million. 3. Parties have also agreed that, at closing,buyer will pay off an existing $9 million note which has been issued by the tobe acquired corporation to the UPE. Thus, an additional $9 million will flow tothe UPE for the note.

Under a number of staff opinionsthat you have issued, the above transaction would be below the $50 million sizeof transaction test. In none of those opinions, however, did I see that debtpayoff as being made to the UPE. I don't think that changes the analysis, butjust wanted to confirm.

If you have any questions, you canreach me at the number below.


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