Contract analysis

I. Introduction and Purpose Calderwood & Harkness LLP represents Ardent Capital Partners III LP ("Ardent Capital" or the "Acquiring Person"), a Delaware limited partnership, as antitrust counsel in connection with its proposed acquisition of 100% of the outstanding equity interests of Pinnacle Health Systems, Inc. ("Pinnacle" or the "Target" or the "Acquired Person"), a Delaware corporation (the "Proposed Transaction

II. Description of the Transaction A. The Parties

1. Acquiring Person — Ardent Capital Partners III LP. The Acquiring Person is Ardent Capital Partners III LP, a Delaware limited partnership, with its principal office located at 399 Park Avenue, 41st Floor, New York, NY 10022 (EIN: 87-3421098). Ardent Capital Partners III LP is the fund vehicle through which the Transaction will be consummated. The general partner of Ardent Capital Partners III LP is Ardent Capital

2. Acquired Person — Pinnacle Health Systems, Inc. The Acquired Person is Pinnacle Health Systems, Inc., a Delaware corporation headquartered at 2200 Lakeshore Boulevard, Suite 500, Charlotte, NC 28202 (EIN: 56-4389201). Pinnacle is led by Dr. Marcus Ellsworth, who serves as Chief Executive Officer and Chairman of the Board of Directors, and Sandra Trevino, who serves as Chief Financial Officer. Pinnacle is a special

3. Selling Sponsor — Veltrano Equity Holdings LLC. Pinnacle's current controlling stockholder is Veltrano Equity Partners Fund V LP, an investment fund managed by Veltrano Equity Holdings LLC, a Delaware limited liability company headquartered at 1400 Elm Street, Suite 3200, Dallas, TX 75201. The managing member of Veltrano Equity Holdings LLC is Theodore "Ted" Hargrove. Veltrano acquired its controlling interest in

III. HSR Jurisdictional Analysis A. Size-of-Transaction Test The Transaction is reportable under the HSR Act because the aggregate total amount of voting securities and assets to be acquired exceeds the applicable size-of-transaction threshold. Specifically, the Transaction's enterprise value of $952 million substantially exceeds the 2024 size-of-transaction threshold of $111.4 million as adjusted by the FTC pursuant

IV. Basis for Early Termination — Absence of Competitive Concerns We respectfully submit that early termination of the waiting period is warranted because the Transaction presents no horizontal overlap, no meaningful change in concentration in any relevant market, and only a competitively insignificant vertical relationship between the parties. Each of these points is addressed in detail below. A. No Horizontal Overl

1. Ambulatory Surgical Center Services (Multi-Specialty): Pinnacle's forty-two ASCs provide outpatient surgical procedures across multiple specialties, including orthopedics, gastroenterology, ophthalmology, pain management, and general surgery. ASC services are properly defined as a distinct product market because ambulatory surgical centers serve as an alternative to hospital outpatient departments ("HOPDs") for a

2. Physician Practice Management Services: Pinnacle's thirty-one affiliated physician practice management entities provide management and administrative services to physician practices specializing in orthopedics, gastroenterology, and ophthalmology. Physician practice management is a distinct product market encompassing the provision of administrative, billing, coding, compliance, human resources, and operational su

1. Charlotte-Concord-Gastonia, NC-SC MSA

4. Nashville-Davidson-Murfreesboro-Franklin, TN MSA

5. Atlanta-Sandy Springs-Alpharetta, GA MSA

6. Tampa-St. Petersburg-Clearwater, FL MSA

9. Dallas-Fort Worth-Arlington, TX MSA Ardent Capital, including all of its portfolio companies and affiliated entities across all funds, does not own, operate, or manage any ambulatory surgical center or physician practice management entity in any of these nine MSAs. Accordingly, there is no geographic overlap between the Acquiring Person and the Acquired Person with respect to the relevant product markets described

V. Item 4(c) and 4(d) Document Production The Acquiring Person's Notification and Report Form is accompanied by a total of seven (7) responsive documents produced pursuant to Items 4(c) and 4(d) of the HSR Act's Notification and Report Form. These documents consist of the following: • Three (3) confidential information memoranda and teaser materials prepared by Pinnacle's financial advisor in connection with the sale

VI. Contractual Filing Obligations The EPA contains several provisions relevant to the parties' HSR Act obligations and the timeline for the Proposed Transaction: • Section 5.4(a) — Filing Obligation and Fee Allocation: Under Section 5.4(a) of the EPA, the parties are obligated to file their respective HSR Act Notification and Report Forms within fifteen (15) business days of the execution date of the EPA (January 31

VII. Request and Conclusion For the reasons set forth herein and in the accompanying White Paper, we respectfully request that the Commission and the Division grant early termination of the initial thirty (30) day waiting period under Section 7A(b)(2) of the Clayton Act, 15 U.S.C. § 18a(b)(2). Absent the grant of early termination, the waiting period would expire on March 17, 2024 (thirty calendar days from the date