Julian and Priya,
I am pleased to confirm that as of earlier today, Friday, February 16, 2024, the Hart-Scott-Rodino premerger notification and report forms for both the acquiring person (Ardent Capital Partners III LP) and the acquired person (Pinnacle Health Systems, Inc.) were filed simultaneously with the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice. The FTC has assigned Transaction No. 20241487 to the filing. This is well within the 15-business-day filing deadline under Section 5.4(a) of the Equity Purchase Agreement, which was executed on January 31, 2024, establishing a contractual filing deadline of February 22, 2024.
The key details of the filing are summarized below.
**Filing Details**
- **Acquiring Person Filer:** Ardent Capital Partners III LP, with Ardent Capital Management LLC identified as the Ultimate Parent Entity. - **Acquired Person Filer:** Pinnacle Health Systems, Inc., filed by target's antitrust counsel, Greenvale Durneval LLP (Jonathan Felder), in coordination with Calderwood & Harkness. - **Transaction Value Reported:** $952 million (enterprise value). - **Filing Fee:** $280,000, paid by Ardent Capital pursuant to EPA §5.4(a). The transaction falls within the $500 million–$999.9 million transaction value tier under the 2024 FTC fee schedule. We have confirmed that the FTC has acknowledged receipt of the wire. - **Item 4(c)/4(d) Documents:** Seven (7) responsive documents were produced on behalf of the acquiring person: three CIMs/teasers, two internal investment committee memoranda, one board presentation, and one email chain discussing the competitive landscape. All documents were privilege-reviewed prior to production and were submitted with the filing. Pinnacle's counsel at Greenvale Durneval produced eleven (11) responsive documents on the acquired person side.
**Early Termination Request**
A request for early termination of the statutory waiting period was included with both filings. In addition, we filed today a voluntary submission (white paper) with the FTC Bureau of Competition presenting the substantive competitive analysis in support of early termination. The white paper demonstrates the absence of any horizontal overlap between Ardent Capital's existing portfolio companies — Marlowe Asset Management Rehabilitation Holdings LLC and Clearpath Diagnostics Inc. — and Pinnacle's operations. It also addresses the competitively insignificant vertical relationship between Marlowe Asset Management's physical therapy clinics and Pinnacle's ambulatory surgery centers.
**Waiting Period and Timeline**
The initial 30-calendar-day HSR waiting period begins today, February 16, 2024, and will expire on March 17, 2024. During this period, there are three possible outcomes:
1. **Early termination is granted** — this is the expected and most likely outcome given the absence of meaningful competitive concerns; 2. **The 30-day period expires without action** — the parties would then be free to close; or 3. **The FTC or DOJ issues a Second Request** for additional information — we consider this unlikely based on our analysis of the competitive landscape.
If early termination is granted, it will be reflected in a notice published in the Federal Register.
I should note that through the interagency clearance process, the transaction has been cleared to the FTC (not DOJ). The FTC staff attorney assigned to the matter is Sarah Whitman in the Bureau of Competition, Mergers IV Division. I have already reached out to Ms. Whitman to introduce the matter and offer our availability for any questions she may have.
**Next Steps**
- Calderwood & Harkness will actively monitor for any communications from FTC staff and will respond promptly to any informal inquiries or requests for additional information. - We will provide immediate notification if early termination is granted or if there are any other developments during the waiting period. - Going forward, we will provide bi-weekly status reports to keep you apprised. - David Ostrander at Whitfield & Crane has been copied on this message for his awareness as he tracks the satisfaction of closing conditions under the EPA.
**Closing Observations**
Today's filing satisfies a key regulatory milestone under the EPA, and the antitrust risk profile of this transaction remains low. As a reminder, the EPA outside date is June 30, 2024, so we have ample runway to clear the remaining closing conditions. We are well positioned for a smooth path through the waiting period.
Please do not hesitate to reach out if you have any questions. I am available at my direct line below, and Monica and Elliot on our team are also fully up to speed.
Best regards,
**Howard Bellamy** Partner, Antitrust & Competition Practice Group Calderwood & Harkness LLP 600 Lexington Avenue, New York, NY 10022 Direct: (212) 554-7180 Email: hbellamy@calderwoodharkness.com
Matter No. 1001-00001
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