PRIVILEGED & CONFIDENTIAL
CALDERWOOD & HARKNESS LLP Attorneys at Law
600 Lexington Avenue New York, NY 10022 Tel: (212) 558-4000
Fax: (212) 558-3588
www.calderwoodharkness.com
February 14, 2024
VIA EMAIL AND HAND DELIVERY
Julian Desmond, Co-Founder & Managing Partner Priya Chandrasekar, Co-Founder & Managing Partner Ardent Capital Management LLC (in its capacity as investment manager of Ardent Capital Partners III LP) 399 Park Avenue, 41st Floor New York, NY 10022
Re: Hart-Scott-Rodino Premerger Notification Filing Fee — Acquisition of Pinnacle Health Systems, Inc. by Ardent Capital Partners III LP Matter No. 1001-00001
Dear Mr. Desmond and Ms. Chandrasekar:
As you know, Calderwood & Harkness LLP has been engaged by Ardent Capital Management LLC, in its capacity as investment manager of Ardent Capital Partners III LP (collectively, "Ardent Capital" or the "Acquirer"), in connection with the preparation and filing of the premerger notification and report form required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), 15 U.S.C. § 18a, in connection with Ardent Capital Partners III LP's proposed acquisition of one hundred percent (100%) of the outstanding equity interests of Pinnacle Health Systems, Inc. ("Pinnacle" or the "Target") (the "Transaction"). The purpose of this letter is to provide you with wire transfer instructions for the payment of the required HSR filing fee to the Federal Trade Commission (the "FTC") in advance of the anticipated filing date of February 16, 2024. As discussed in greater detail below, the filing fee must be received by the FTC prior to, or contemporaneous with, the submission of the HSR Notification and Report Form. Accordingly, we respectfully request your prompt attention to this matter.
1. Filing Fee Amount and Applicable Fee Tier
The aggregate value of the Transaction, calculated on an enterprise value basis, is Nine Hundred Fifty-Two Million Dollars ($952,000,000), as set forth in the Equity Purchase Agreement, dated as of January 31, 2024 (the "EPA"), by and among Ardent Capital Partners III LP, Ardent Capital Acquisition Corp. (a newly formed acquisition subsidiary of Ardent Capital Partners III LP), and Pinnacle Health Systems, Inc. The transaction value was determined in accordance with the methodology prescribed by the HSR Act and the rules promulgated thereunder by the FTC, 16 C.F.R. Parts 801–803, and reflects the total consideration to be paid by the Acquirer for all of the outstanding equity of the Target, inclusive of the assumption or repayment of outstanding indebtedness.
Under the 2024 FTC filing fee schedule, as adjusted pursuant to the HSR Act, 15 U.S.C. § 18a, and the FTC's annual threshold adjustments published in the Federal Register (89 Fed. Reg. 8584 (Feb. 8, 2024)), a transaction with a value of $952,000,000 falls within the $500,000,000 to $999,900,000 filing fee tier. The applicable filing fee for transactions falling within this tier is $280,000.
For reference, the 2024 filing fee tiers are as follows:
The 2024 size-of-transaction threshold, below which no HSR filing is required, is $111.4 million. The Transaction value of $952 million clearly and substantially exceeds this threshold, and therefore an HSR filing is required (assuming all other jurisdictional criteria are met).
We note further that the size-of-person thresholds established under the HSR Act and the FTC's annual adjustments are also satisfied in this case. Specifically, Ardent Capital Partners III LP has total assets, measured by aggregate fund committed capital, of approximately $4.8 billion, which exceeds the applicable size-of-person threshold of $222.7 million. Additionally, the Target, Pinnacle Health Systems, Inc., has annual net sales of approximately $637.4 million and total assets of approximately $812 million, both of which independently exceed the $22.3 million threshold applicable to the acquired person. Accordingly, no further analysis of the size-of-person test is necessary to confirm the Transaction's HSR reportability.
2. Contractual Obligation for Fee Payment
Pursuant to Section 5.4(a) of the EPA, the filing fee for the HSR premerger notification is to be borne solely by the Acquirer, Ardent Capital Partners III LP. The relevant provision of the EPA states, in pertinent part:
"The Acquirer shall be responsible for the payment of all filing fees required in connection with any filings or submissions made pursuant to the HSR Act or any other applicable antitrust or competition law in connection with the transactions contemplated by this Agreement."
Accordingly, we confirm that Ardent Capital Partners III LP is solely responsible for the payment of the $280,000 filing fee described above. No portion of the filing fee is to be allocated to or borne by Pinnacle Health Systems, Inc. or its stockholders.
We also note, for your records, that only one filing fee is required per transaction under the HSR Act. The filing fee is paid by the acquiring person, and no separate filing fee is required in connection with the acquired person's HSR Notification and Report Form. Accordingly, no additional filing fee payment will be necessary on the part of the Target or its counsel.
3. Wire Transfer Instructions
We respectfully request that Ardent Capital remit payment of $280,000 via wire transfer to the Federal Trade Commission in accordance with the wire transfer instructions set forth below. These instructions correspond to the FTC's designated U.S. Treasury depository account for the receipt of HSR premerger notification filing fees:
Bank Name: U.S. Treasury — Federal Reserve Bank of New York (FTC Designated Depository)
ABA/Routing Number: 021030004
Account Name: Federal Trade Commission — Premerger Filing Fee
Account Number: 6820-2598-7104
Beneficiary: Federal Trade Commission, Bureau of Competition, Premerger Notification Office
Amount: $280,000.00
Reference/Memo Line: Please include the following information in the reference or memo field of the wire transfer:
• Name of Acquiring Person: Ardent Capital Partners III LP
• Name of Acquired Person: Pinnacle Health Systems, Inc.
• Anticipated Transaction Number: (to be assigned upon filing — please note "HSR Filing Fee — Ardent Capital / Pinnacle Health Systems" in the interim)
Please note that Calderwood & Harkness LLP will provide the exact and finalized wire instructions as furnished directly by the FTC Premerger Notification Office ("PNO"), which may be obtained through the FTC's e-filing system or by direct communication with the PNO. The wire instructions set forth above are current as of the date of this letter and are based upon instructions previously furnished by the FTC in connection with recent filings handled by our firm. However, the FTC may update its banking or depository information from time to time without advance notice. Accordingly, we strongly recommend that you verify the wire instructions with our office before initiating the wire transfer to ensure that the payment is directed to the correct account and processed without delay.
If you have any questions regarding the wire instructions, or if your banking institution requires additional information or verification, please do not hesitate to contact us immediately.
4. Timing Requirements
The timing of the wire transfer is critical to ensuring the timely submission of the HSR filing. We set forth below the key dates and deadlines applicable to the filing fee payment:
(a) Wire Initiation Deadline. The wire transfer must be initiated no later than February 15, 2024 (i.e., the business day prior to the anticipated filing date), to ensure that the funds are received and confirmed by the FTC on or before the target filing date of February 16, 2024. We recommend initiating the wire transfer as early in the business day as possible on February 15, 2024, to allow sufficient time for processing and settlement. Depending on your banking institution, same-day domestic wires initiated before approximately 2:00 p.m. Eastern Time are generally settled and confirmed by end of business; however, processing times may vary.
(b) FTC Processing Requirement. The FTC will not accept or process the HSR Notification and Report Form until the filing fee has been received and confirmed in the FTC's designated account. This is a strict requirement under 16 C.F.R. § 803.9. If the filing fee has not been received by the FTC at the time the HSR Notification and Report Form is submitted, the submission will not be considered "filed" for purposes of commencing the statutory waiting period under the HSR Act, and the FTC may reject or return the filing.
(c) Contractual Filing Deadline. Pursuant to Section 5.4(a) of the EPA, the parties are required to file their respective HSR Notification and Report Forms within fifteen (15) business days of the execution date of the EPA. The EPA was executed on January 31, 2024. Counting fifteen (15) business days from January 31, 2024 (inclusive of the next business day, February 1, as the first business day), the contractual filing deadline is February 22, 2024. Our target filing date of February 16, 2024 provides a comfortable margin of four (4) business days ahead of this contractual deadline, which will allow time to address any unforeseen issues with the filing or the wire transfer. Notwithstanding this margin, we recommend proceeding expeditiously in order to commence the statutory waiting period as early as practicable.
(d) Wire Confirmation. We respectfully request that Ardent Capital provide Calderwood & Harkness with a copy of the wire transfer confirmation (including the wire reference number, amount, date and time of initiation, and receiving bank information) promptly upon execution of the wire. The wire confirmation will be included as part of the cover letter and transmittal package submitted to the FTC PNO with the HSR filing, and is required by the FTC as evidence of fee payment. Please direct the wire confirmation to both Howard Bellamy and Monica Reyes at the contact information provided in Section 6 below.
5. Confirmation and Follow-Up
Upon receipt of the wire transfer confirmation from Ardent Capital, Calderwood & Harkness will take the following steps to confirm receipt of the filing fee and finalize the HSR filing submission:
First, we will confirm receipt and settlement of the funds with the FTC Premerger Notification Office. This confirmation typically involves direct communication with the PNO staff to verify that the wire transfer has been credited to the FTC's account and has been associated with the correct filing.
Second, we will include the wire confirmation and filing fee payment evidence as part of the formal cover letter and transmittal package to be submitted to the FTC PNO accompanying the acquiring person's HSR Notification and Report Form. The transmittal package will include, among other items, the executed HSR Notification and Report Form, the filing fee payment confirmation, the required documentary attachments pursuant to 16 C.F.R. § 803.1, and any affidavits or certifications required under the HSR Rules.
Third, we wish to advise you that the acquired person's HSR filing is being coordinated with Greenvale Durneval LLP, which serves as antitrust counsel to Pinnacle Health Systems, Inc. in connection with this Transaction. The acquired person's filing is being led by Jonathan Felder, a partner at Greenvale Durneval. Our team has been in regular communication with Mr. Felder's team, and both the acquiring person's and the acquired person's HSR Notification and Report Forms are expected to be submitted simultaneously on February 16, 2024. Simultaneous filing is not strictly required under the HSR Act; however, coordinated submission is standard practice, facilitates prompt processing by the FTC, and enables the commencement of the statutory waiting period at the earliest possible date.
Fourth, we confirm that a request for early termination of the statutory waiting period will be included in the acquiring person's HSR Notification and Report Form submitted on February 16, 2024. An early termination request asks the FTC and the Antitrust Division of the U.S. Department of Justice (the "DOJ") to terminate the initial 30-day waiting period prior to its expiration, if no competitive concerns are identified. We note that the granting of early termination is within the sole discretion of the reviewing agencies and cannot be guaranteed. We will keep you advised as to the status of the early termination request following the filing.
6. Contact Information
Should you have any questions regarding the wire transfer, the filing fee, or any other aspect of the HSR filing process, please do not hesitate to contact either of the following members of our team:
Howard Bellamy Partner, Antitrust & Competition Practice Group Calderwood & Harkness LLP 600 Lexington Avenue, New York, NY 10022 Direct: (212) 558-4127
Email: hbellamy@calderwoodharkness.com
Monica Reyes Associate, Antitrust & Competition Practice Group Calderwood & Harkness LLP 600 Lexington Avenue, New York, NY 10022 Direct: (212) 558-4263
Email: mreyes@calderwoodharkness.com
We appreciate your prompt attention to this matter. Timely payment of the filing fee is essential to maintaining our target filing date and ensuring the commencement of the HSR waiting period on schedule. We remain available at your convenience to discuss any questions or to provide additional information as needed.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Howard Bellamy Partner, Antitrust & Competition Practice Group Calderwood & Harkness LLP 600 Lexington Avenue New York, NY 10022
cc: (via email)
Monica Reyes, Calderwood & Harkness LLP Elliot Nguyen, Calderwood & Harkness LLP David Ostrander, Whitfield & Crane LLP (transaction counsel to Ardent Capital)
Enclosure:
FTC Premerger Notification Office Wire Transfer Instructions (as furnished by the FTC)
| Transaction Value | Filing Fee |
| Greater than $111.4 million but less than $200 million | $30,000 |
| $200 million or greater but less than $500 million | $105,000 |
| $500 million or greater but less than $1 billion | $280,000 |
| $1 billion or greater but less than $2 billion | $280,000 |
| $2 billion or greater but less than $5 billion | $830,000 |
| $5 billion or greater | $2,335,000 |