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Date
Rule
801.10
Staff
Premerger Notification Office
Response/Comments

Yes, rollover equity is part of the consideration for the transaction and, therefore, must be included in the size of the transaction.

Question

Good afternoon, I’m writing to inquire what the FTC’s current position is on rollover equity in transactions, specifically as it relates to valuing the size of transaction. In a transaction where Company A will acquire 100% of the membership interests of Company B, via Newco (a wholly owned, newly created subsidiary of Company A). The proposed purchase price for the membership interests is $120 million in cash, with another $20 million in rollover equity in Company A. Assuming there are other transaction related deductions, would this be a reportable transaction under the current $126.4 million size of transaction threshold?

About Informal Interpretations

Informal interpretations provide guidance from PNO staff on the applicability of the HSR rules to specific fact situations. They do not necessarily reflect the position of the Commission. You should not rely on them as a substitute for reading the Act and the Rules themselves. These materials do not, and are not intended to, constitute legal advice. 

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