1903005 Informal Interpretation

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Sheinberg, Samuel I.
From: 	Sheinberg, Samuel I.
Sent: 	Thursday, March 21, 2019 9:46 AM
To:
Cc:
Subject: 	RE: Question Re: Cash Proceeds from a Loan
Confirmed.
From:
Sent: Thursday, March 21, 2019 9:18 AM
To: Walsh, Kathryn E. <kwalsh@ftc.gov>; Berg, Karen E. <KBERG@ftc.gov>; Biagioli, Kimberley <kbiagioli@ftc.gov>;
Carson, Timothy <tcarson@ftc.gov>; Sheinberg, Samuel I. <SSHEINBERG@ftc.gov>; Six, Anne <asix@ftc.gov>;
Whitehead, Nora <nwhitehead@ftc.gov>
Subject: FW: Question Re: Cash Proceeds from a Loan
From:
Sent: Thursday, March 21, 2019 9:17:02 AM (UTC-05:00) Eastern Time (US & Canada)
To:
Cc:
Subject: Question Re: Cash Proceeds from a Loan
Confidential
Good morning everyone,
I’m writing to confirm my view regarding cash proceeds from a loan to be used to make an acquisition that are not on
the acquiring person’s most recent regularly prepared balance sheet available at closing.
X, an entity that is its own UPE, will acquire Y. At the time of the acquisition, X’s most recent regularly prepared annual
income statement will show less than $180 million in annual net sales and its most recent regularly prepared balance
sheet will show less than $180 million in total assets. Prior to the closing, it will borrow some of the cash it will need to
acquire Y and this cash will not yet be reflected on the most recent regularly prepared consolidated balance sheet of X
available a closing. If it were added to the total assets on such balance sheet, however, X would have over $180 million
in total assets.
We understand that we would not need to add the proceeds of the loan to the assets on X’s most recent regularly
prepared balance sheet available at closing when assessing whether X satisfies the $180 million size of person
test. Instead, we can rely on the total assets figure on X’s most recent regularly prepared balance sheet available at
closing.
Is this still the case?

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