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MEMORANDUM

PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT

TO: Beatrice Holloway, Responsible Partner, Mergers & Acquisitions

FROM: Derek Okonkwo, Working Associate, Mergers & Acquisitions

DATE: April 22, 2024

RE: Antitrust and Regulatory Filing Requirements — Proposed Sale of Meridian Press Holdings LLC

Matter No.: 1043-00002

CLIENT: Aurelius Global Media Group PLC

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I. Executive Summary

Calderwood & Harkness LLP represents Aurelius Global Media Group PLC ("Aurelius" or "AGMG") in connection with the proposed carve-out and sale of 100% of the membership interests in Meridian Press Holdings LLC ("MPH" or "Meridian Press") by Aurelius Media Holdings Inc. ("AMH"), a wholly owned Delaware subsidiary of Aurelius, to Ridgeline Publishing Acquisition Corp. ("Ridgeline" or "Buyer"), a newly formed acquisition vehicle of Pinnacle Ridge Capital Partners Fund IV, L.P. ("PRCP IV" or "Pinnacle Ridge"). The aggregate enterprise value of the proposed transaction is $480,000,000. This memorandum analyzes all antitrust and foreign investment regulatory filing requirements applicable to the transaction and assesses the substantive antitrust risk profile of the proposed sale.

Based on our analysis of the applicable regulatory regimes and the competitive characteristics of the transaction, our conclusions are as follows:

Hart-Scott-Rodino Act. A pre-merger notification filing is required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"). Both the size-of-transaction and size-of-person thresholds are satisfied. The applicable filing fee is $280,150, which is to be borne by the Buyer pursuant to the anticipated terms of the definitive agreement (the Membership Interest Purchase Agreement, or "MIPA"). We recommend that early termination of the statutory 30-day waiting period be requested concurrently with the filing. Based on the competitive profile of the transaction, we assess the substantive antitrust risk as low and expect that early termination will be granted within approximately four to six weeks of filing.

Canadian Competition Act. A pre-merger notification is required under Part IX of the Canadian Competition Act (R.S.C. 1985, c. C-34) due to the inclusion in the transaction of Meridian Press Canada ULC, an unlimited liability company organized under the laws of British Columbia, which is a direct subsidiary of MPH and maintains operations in Toronto and Vancouver. We expect clearance to be obtained without conditions, given the absence of competitive overlaps in the Canadian market.

CFIUS. No filing is required under the Committee on Foreign Investment in the United States ("CFIUS") regime. The transaction does not involve a foreign acquiring person — Pinnacle Ridge is a US-domiciled private equity fund — and MPH does not constitute a "TID US business" within the meaning of the Foreign Investment Risk Review Modernization Act of 2018 ("FIRRMA"). No mandatory or voluntary CFIUS filing is warranted.

Other Jurisdictions. Based on MPH's revenue footprint, which is predominantly concentrated in the United States and Canada, no other foreign antitrust or foreign investment filings have been identified as required. We address the EU Merger Regulation and UK Competition and Markets Authority regimes below and conclude that neither is triggered.

Overall Antitrust Risk Assessment: Low. We do not anticipate that either the U.S. Department of Justice Antitrust Division or the Canadian Competition Bureau will challenge or impose conditions on this transaction.

II. Transaction Overview

The following summarizes the material terms and parties relevant to this antitrust and regulatory analysis.

Seller. Aurelius Media Holdings Inc. is a Delaware corporation (Secretary of State file no. 5987324) and a wholly owned US holding subsidiary of Aurelius Global Media Group PLC, a public limited company organized under the laws of England and Wales (Companies House No. 08431276). AMH was established as the US holding company for Aurelius's North American media assets and directly owns 100% of the membership interests in MPH.

Target. Meridian Press Holdings LLC is a Delaware limited liability company (Secretary of State file no. 4521889) that is treated as a disregarded entity for US federal income tax purposes. MPH is directly owned by AMH. MPH serves as the holding company for the Meridian Press group of companies and, through its operating subsidiaries, conducts the business being acquired.

Target's Key Subsidiaries Included in the Carve-Out. The following entities are direct or indirect subsidiaries of MPH and are included in the proposed transaction:

• Meridian Distribution Services Inc. — a Delaware corporation (file no. 4736201) that operates 14 distribution centers across North America responsible for the warehousing, fulfillment, and physical distribution of books and periodicals published by the Meridian Press group and, to a limited extent, third-party publishers.

• Bellweather Academic Press Inc. — a Delaware corporation (file no. 4801133) that publishes academic and educational content, including textbooks, scholarly journals, and reference materials, primarily marketed to universities, libraries, and educational institutions in the United States.

• Foxglove Media LLC — a New York limited liability company that publishes periodicals and magazines under the Foxglove Periodicals brand, including a portfolio of approximately 18 active print and digital periodical titles.

• Meridian Press Canada ULC — an unlimited liability company organized under the laws of British Columbia, with leased office and warehouse facilities in Toronto, Ontario, and Vancouver, British Columbia, responsible for the distribution, marketing, and sale of Meridian Press publications in the Canadian market.

Buyer. Ridgeline Publishing Acquisition Corp. is a Delaware corporation to be incorporated as the direct purchaser of the membership interests in MPH. Ridgeline will serve as the acquisition vehicle and portfolio company of Pinnacle Ridge Capital Partners Fund IV, L.P. (Delaware limited partnership, file no. 6234577), a private equity fund managed by Pinnacle Ridge Capital Management LLC. The general partner of PRCP IV is Pinnacle Ridge Capital GP IV LLC.

Transaction Structure. The proposed transaction is structured as a sale of 100% of the membership interests in MPH by AMH to Ridgeline. Upon consummation, Ridgeline will own 100% of MPH and all of its direct and indirect subsidiaries, including the four subsidiaries enumerated above.

Enterprise Value. The aggregate enterprise value of the proposed transaction is $480,000,000. The equity purchase price and related adjustments (including working capital adjustments, indebtedness, and transaction expenses) will be set forth in the definitive MIPA.

Financial Advisors. Drummond Zanthor Partners LLC is serving as financial advisor to the Buyer. Haverford Whitmore & Co. is serving as financial advisor to the Seller.

Business of the Target. MPH, through its subsidiaries, operates across three principal lines of business: (i) trade and mass-market book publishing under the Meridian Books imprint; (ii) academic and educational content publishing under the Bellweather Academic brand; and (iii) periodical publishing under the Foxglove Periodicals brand. The Meridian Press group also operates a physical distribution network through Meridian Distribution Services Inc., which maintains 14 distribution centers located across the United States and Canada. As of the end of fiscal year 2023, MPH employed approximately 2,400 persons across all subsidiaries and locations. MPH's consolidated revenue for FY2023 was approximately $1,140,000,000, with Adjusted EBITDA of approximately $96,000,000, representing an Adjusted EBITDA margin of approximately 8.4%.

Buyer's Existing Portfolio. PRCP IV is a $6.2 billion middle-market private equity fund with an investment mandate focused on media, information services, and business services. To date, Fund IV has deployed approximately $2.8 billion across nine platform investments. The acquisition of Meridian Press would represent the fund's largest single platform investment. Critically for antitrust purposes, no existing portfolio company of PRCP IV operates in the traditional book publishing, periodical publishing, or educational content publishing space. This assessment is based on publicly available information regarding PRCP IV's portfolio and representations made by Buyer's counsel, Graham Ashworth of Hathaway, Locke & Barnett LLP.

III. Hart-Scott-Rodino Act Analysis

A. Applicability and Jurisdictional Thresholds

The HSR Act (15 U.S.C. § 18a) and the implementing rules promulgated by the Federal Trade Commission at 16 C.F.R. Parts 801 through 803 require that parties to certain acquisitions of voting securities, assets, or non-corporate interests file a Notification and Report Form with both the FTC and the Antitrust Division of the U.S. Department of Justice prior to consummating the transaction. The obligation to file arises when specified jurisdictional thresholds are met and no exemption applies.

The proposed transaction involves the acquisition by Ridgeline (on behalf of Pinnacle Ridge/PRCP IV) of 100% of the membership interests in MPH, a Delaware limited liability company. Under 16 C.F.R. § 801.2(d), the acquisition of non-corporate interests (such as LLC membership interests) is treated as an acquisition of the assets of the LLC for HSR purposes when the acquirer will hold 100% of the interests. Accordingly, the proposed transaction is properly analyzed as an asset acquisition under the HSR rules, with the value of the transaction measured by reference to the enterprise value or purchase price.

Size-of-Transaction Test. The enterprise value of the proposed transaction is $480,000,000. Under the current (2024) HSR thresholds, as adjusted annually pursuant to Section 7A(a)(2) of the Clayton Act and published in the Federal Register, the minimum notification threshold is $111.4 million. The proposed transaction value of $480,000,000 substantially exceeds this threshold. Accordingly, the size-of-transaction test is satisfied.

Size-of-Person Test. Because the transaction value exceeds $111.4 million but does not exceed $500 million (the higher threshold above which the size-of-person test does not apply in 2024), the size-of-person test must also be met. Specifically, one party to the transaction must have total assets or annual net sales of at least $222.7 million, and the other party must have total assets or annual net sales of at least $22.3 million.

With respect to the acquired person, Aurelius Global Media Group PLC reported consolidated revenue of approximately £3.8 billion (approximately $4.8 billion at current exchange rates) for FY2023, and AMH and its subsidiaries, including MPH, had total assets well in excess of the applicable threshold. With respect to the acquiring person, Pinnacle Ridge Capital Partners Fund IV, L.P. has a total fund size of $6.2 billion, with total assets (including committed capital) substantially exceeding the $222.7 million threshold. Accordingly, the size-of-person test is satisfied for both parties.

Ultimate Parent Entity of the Acquiring Person. Identification of the correct "ultimate parent entity" (or "UPE") is essential to proper HSR compliance. Under 16 C.F.R. § 801.1(a)(3), the UPE is the entity that is not controlled by any other entity. For private equity fund structures, the analysis requires consideration of whether the fund's general partner, management company, or the fund itself constitutes the UPE, as well as the application of the "associate" rules.

In this case, Ridgeline Publishing Acquisition Corp. will be a direct subsidiary of PRCP IV. PRCP IV is a Delaware limited partnership whose general partner is Pinnacle Ridge Capital GP IV LLC. The fund is managed by Pinnacle Ridge Capital Management LLC. Under the FTC's guidance on private equity fund structures, the UPE is typically the fund itself (i.e., Pinnacle Ridge Capital Partners Fund IV, L.P.) or, in certain circumstances, the general partner entity. We will conduct a detailed analysis of the fund's limited partnership agreement to determine whether Pinnacle Ridge Capital GP IV LLC (the general partner) or PRCP IV itself is the appropriate UPE for filing purposes. Based on our preliminary review, we expect the UPE to be Pinnacle Ridge Capital Partners Fund IV, L.P. We will also analyze whether any "associate" relationships exist between PRCP IV and other Pinnacle Ridge-managed funds that could affect the filing analysis.

Ultimate Parent Entity of the Acquired Person. The UPE of the acquired person (the selling side) is Aurelius Global Media Group PLC, as the ultimate parent entity that controls AMH and, in turn, MPH, through a chain of direct and indirect ownership. Aurelius is a publicly traded company with no single controlling shareholder, and thus Aurelius itself serves as the UPE.

Conclusion. Based on the foregoing analysis, an HSR Act pre-merger notification filing is required for the proposed transaction.

B. Filing Mechanics

Filing Parties. Under the HSR Act and implementing rules, both the acquiring person and the acquired person are required to file separate Notification and Report Forms. The acquiring person is Pinnacle Ridge Capital Partners Fund IV, L.P. (through Ridgeline), and the acquired person is Aurelius Global Media Group PLC (through AMH). Each party's filing must include certain financial information, a description of the transaction, information regarding the parties' business operations, and, importantly, certain documentary attachments.

Filing Fee. The applicable filing fee for the proposed transaction is $280,150. Under the HSR Act's tiered fee schedule for 2024, as amended by the Merger Filing Fee Modernization Act of 2022, transactions valued above $161.5 million but not exceeding $500 million are subject to a filing fee of $280,150. The proposed enterprise value of $480,000,000 falls within this tier. Pursuant to the anticipated terms of the definitive MIPA, the filing fee is to be borne by the Buyer (Pinnacle Ridge/Ridgeline). Only one filing fee is required per transaction, regardless of the fact that both parties must file.

HSR Transaction Number. Our internal tracking systems have designated this filing as HSR Transaction Number 20241537. The official PNO Transaction Number will be assigned by the FTC upon acceptance of the filings.

Filing Timeline. We recommend targeting a filing date of approximately May 20, 2024, following the expected execution of the Letter of Intent or Term Sheet (anticipated in early May 2024) and completion of the Item 4(c) and 4(d) document collection and privilege review process. Under the HSR rules, the Notification and Report Form may be filed at any time after the parties have entered into a definitive agreement or, alternatively, a letter of intent. We note that the HSR rules permit filing based on a letter of intent or term sheet, provided it is sufficiently definitive to identify the parties, the structure, and the general terms of the proposed transaction.

Waiting Period. The statutory waiting period under the HSR Act is 30 calendar days from the date on which both filings are accepted by the FTC and the DOJ (i.e., certified as substantially complete by the Premerger Notification Office). During this period, the parties may not consummate the transaction. The waiting period may be terminated early by the reviewing agency (see below) or extended by the issuance of a Request for Additional Information and Documentary Material, commonly referred to as a "Second Request."

Early Termination. We recommend that both parties request early termination of the waiting period in their respective Notification and Report Forms. Under Section 7A(b)(2) of the Clayton Act, the FTC and DOJ have the authority to grant early termination prior to the expiration of the 30-day waiting period. The grant of early termination is published on the FTC's website. Based on the competitive profile of this transaction — a financial buyer with no horizontal overlaps acquiring a target in a fragmented industry — we anticipate that early termination will be granted, potentially within four to six weeks of the filing date. We note, however, that the FTC suspended the practice of granting early termination in February 2021, and subsequently reinstated it in limited form. As of the date of this memorandum, the agencies have resumed granting early termination on a case-by-case basis, and we expect that it will be available for this transaction.

Item 4(c) and 4(d) Documents. The HSR Notification and Report Form requires production of certain categories of documents that have been prepared by or for officers, directors, or, in the case of the acquired person, board members of the filing entity and that analyze the proposed transaction with respect to competition, competitors, markets, market shares, potential for sales growth, or expansion into new product or geographic markets. These documents, commonly referred to as "Item 4(c)" documents (relating to the specific transaction) and "Item 4(d)" documents (relating to competition in relevant markets, regardless of whether they reference the specific transaction), must be identified, collected, reviewed for privilege, and produced with the filing.

We are coordinating with the Aurelius internal team — specifically, Thomas Whitfield, SVP Corporate Development, and Priya Nandakumar, CFO — as well as with the Seller's financial advisor, Haverford Whitmore & Co. (Catherine Liang, Managing Director), to identify and collect all potentially responsive documents. We will conduct a thorough privilege review of these materials prior to production and will prepare a privilege log as necessary.

Given the size of the transaction and the involvement of a financial advisor, we anticipate that the Item 4(c) document production will include, at a minimum, the Confidential Information Memorandum prepared by Haverford Whitmore, management presentations prepared by MPH for prospective bidders, any board presentations or resolutions authorizing the sale, and internal analyses prepared by Aurelius regarding the competitive positioning of MPH. The scope of the Item 4(d) document production will depend on the extent to which MPH's officers and directors have created or received documents analyzing competitive dynamics in the publishing industry during the relevant time period (typically the twelve months preceding the filing).

Gun-Jumping Considerations. We take this opportunity to remind the client that prior to the expiration or early termination of the HSR waiting period, the parties to the proposed transaction must not consummate the acquisition and must continue to operate their respective businesses independently. The HSR Act's pre-merger notification requirements are designed to give the reviewing agencies an opportunity to evaluate the competitive effects of a proposed transaction before it is consummated. Any premature transfer of beneficial ownership, operational control, or competitively sensitive information may constitute "gun-jumping" in violation of Section 7A(a) of the Clayton Act, which carries civil penalties of up to $51,744 per day.

We recommend that the interim operating covenants in the MIPA be drafted with gun-jumping compliance in mind, particularly with respect to provisions that may grant the Buyer approval rights over the ordinary course conduct of MPH's business during the period between signing and closing. We will work with the deal team to ensure that the MIPA's interim operating covenants are appropriately tailored to permit the Seller to continue operating MPH independently while providing the Buyer with customary protections for the preservation of the business.

C. Expected Timeline

Based on our analysis and experience with transactions of this nature, we project the following timeline for the HSR process:

In the event that a Second Request is issued — a scenario that we assess as very unlikely based on the competitive profile of this transaction (see Section V below) — the parties would be required to produce extensive documentary materials and respond to detailed interrogatories. The issuance of a Second Request would extend the pre-closing antitrust timeline by a minimum of three to six months, and potentially longer, depending on the scope of the request and the pace of compliance. We address the risk of a Second Request in greater detail in Section V.D below.

D. Assigned Reviewing Agency

Transactions reported under the HSR Act are reviewed by either the FTC or the DOJ Antitrust Division pursuant to a clearance allocation process between the two agencies. The determination of which agency reviews a particular transaction is based on the agencies' respective expertise and historical practice in the relevant industry sector.

Publishing transactions, including recent high-profile matters in the book publishing industry, have historically been reviewed by the DOJ Antitrust Division rather than the FTC. We note, in particular, that the DOJ's 2022 challenge to the proposed Kestrel Industries/Brightmoor & Co. merger (which was ultimately blocked following a bench trial before the Honorable Florence Y. Pan of the United States District Court for the District of Columbia) confirmed the DOJ's active interest in and institutional expertise regarding the competitive dynamics of the book publishing industry.

Accordingly, we anticipate that the DOJ Antitrust Division will assert clearance over this transaction. This assessment is relevant to the substantive risk analysis in Section V, as the DOJ's enforcement priorities and analytical framework in the publishing sector are informed by the agency's experience in the Kestrel Industries matter.

IV. Canadian Competition Act Analysis

A. Applicability. MPH's subsidiary, Meridian Press Canada ULC, is an unlimited liability company organized under the laws of British Columbia, with leased office and warehouse locations in Toronto, Ontario, and Vancouver, British Columbia. Meridian Press Canada ULC is responsible for the distribution, marketing, and sale of Meridian Press publications in the Canadian market and employs approximately 85 persons across its two locations.

The Canadian Competition Act (R.S.C. 1985, c. C-34), as amended, requires pre-merger notification to the Commissioner of Competition for transactions that meet both the "size of parties" and "size of transaction" thresholds set forth in Part IX of the Act (Notifiable Transactions, Sections 109–123). Canada's merger notification regime is a mandatory, suspensory filing requirement, meaning that the parties may not close the transaction until the applicable waiting period has expired or clearance has been obtained.

Size of Parties Test. Under Section 109(1) of the Competition Act, the parties to a transaction (together with their affiliates) must have combined assets in Canada, or combined annual gross revenues from sales in, from, or into Canada, that exceed the applicable threshold. For 2024, this threshold is CAD $400 million. Aurelius Global Media Group PLC reported consolidated global revenue of approximately £3.8 billion (approximately CAD $6.5 billion at current exchange rates) for FY2023. Even if only a fraction of this revenue is derived from sales into or within Canada, the combined revenues of the parties to the transaction (including Aurelius's affiliates and Pinnacle Ridge's portfolio companies) are expected to substantially exceed the CAD $400 million threshold. Accordingly, the size-of-parties test is expected to be satisfied.

Size of Transaction Test. Under Section 110 of the Competition Act, the assets in Canada of the entity being acquired, or the annual gross revenues from sales in or from Canada generated from those assets, must exceed the applicable threshold. For 2024, this threshold is CAD $93 million. Meridian Press Canada ULC's Canadian operations must be assessed against this threshold. Based on preliminary due diligence information, MPH's overall North American distribution network — which includes distribution centers and operations serving the Canadian market — generates significant Canadian revenue. We note, however, that the precise figure for Canadian-specific revenues and assets requires confirmation. We are coordinating with Angela Moretti, SVP Finance of MPH, to obtain detailed financial data for Meridian Press Canada ULC and any other assets attributable to the Canadian operations. Based on MPH's total consolidated revenue of $1.14 billion and the scale of its Canadian operations, we believe it is likely (though not yet confirmed) that the Canadian revenues and/or assets attributable to MPH's Canadian business exceed the CAD $93 million threshold.

Conclusion. Pre-merger notification under Part IX of the Canadian Competition Act is expected to be required. We recommend filing promptly after, or concurrently with, the HSR filing in the United States.

B. Filing Mechanics and Timeline

Filing Form. Canada's merger notification system provides for two types of notification filings: a short-form notification and a long-form notification. The short-form notification requires less detailed information and is available when the competitive issues raised by a transaction are expected to be straightforward. Given the absence of horizontal overlaps between Pinnacle Ridge's portfolio and MPH's Canadian business, we expect that a short-form notification will be appropriate. However, if the Competition Bureau requests additional information, the parties may be required to provide a long-form filing or supplemental data.

Waiting Period. Upon the filing of a certified complete short-form notification, the applicable waiting period is 30 calendar days. The parties may not close the transaction during this waiting period unless the Commissioner of Competition issues an Advance Ruling Certificate ("ARC") or the waiting period expires without action. In the case of a long-form notification, the waiting period is also 30 calendar days from certified completion. The Commissioner may issue a supplementary information request, which effectively restarts the clock, though this step is typically reserved for transactions raising substantive competitive concerns.

Advance Ruling Certificate / No-Action Letter. To expedite the clearance process, we recommend that the parties simultaneously file the required notification and submit a request for an ARC or, alternatively, a "no-action" letter from the Commissioner of Competition. An ARC is issued when the Commissioner is satisfied that the proposed transaction would not be likely to result in a substantial prevention or lessening of competition. A no-action letter is a less formal mechanism by which the Commissioner advises the parties that she does not intend to challenge the transaction at the present time. Based on the competitive profile of this transaction, we believe that an ARC or no-action letter will be obtainable.

Expected Clearance Timeline. We anticipate that Canadian clearance will be obtained within four to eight weeks of the notification filing. Our target is to obtain clearance by late July 2024, which is consistent with the overall transaction timeline.

Filing Fee. The filing fee for a pre-merger notification under the Canadian Competition Act is CAD $75,000 (as of 2024). The allocation of this fee between the parties should be addressed in the definitive MIPA. Customary practice varies, but in many transactions, the fee is borne by the buyer or shared equally between the parties.

Substantive Risk in Canada. The substantive antitrust risk in Canada is assessed as low. The same competitive analysis that applies in the United States (see Section V below) is equally applicable in Canada: Pinnacle Ridge has no existing publishing operations in Canada, and the Canadian publishing market, while distinct in certain respects from the US market, is characterized by the presence of multiple competitors, including major international publishers with Canadian subsidiaries. We do not anticipate that the Commissioner of Competition will raise concerns regarding this transaction.

C. Coordination with HSR Filing

To ensure that the antitrust review process does not become a bottleneck in the transaction timeline, we recommend coordinating the timing of the Canadian notification with the HSR filing in the United States. Both filings should target submission by late May 2024, allowing for parallel review by the DOJ and the Canadian Competition Bureau. This coordinated approach will minimize the risk that one jurisdiction's review process delays the overall closing timeline.

We will coordinate with Buyer's counsel, Graham Ashworth of Hathaway, Locke & Barnett LLP, on the logistics of parallel filing, including the preparation of consistent factual descriptions and market analyses for use in both jurisdictions.

V. Substantive Antitrust Risk Assessment

A. Relevant Markets

The substantive antitrust analysis of the proposed transaction requires identification of the relevant product and geographic markets in which the merging parties compete or could potentially compete.

Product Markets. MPH's business encompasses three principal product categories: (i) trade and mass-market book publishing (Meridian Books imprint), including fiction and non-fiction titles for general readership; (ii) academic and educational publishing (Bellweather Academic Press), including textbooks, scholarly journals, and reference materials; and (iii) periodical publishing (Foxglove Periodicals), including a portfolio of approximately 18 print and digital periodical titles. In addition, MPH operates a physical distribution network through Meridian Distribution Services Inc., which provides warehousing, fulfillment, and distribution services for MPH's own publications and, to a limited extent, third-party publishers.

Each of these categories — book publishing, academic/educational publishing, periodical publishing, and distribution services — represents a potentially relevant product market for antitrust purposes. The DOJ has historically analyzed the book publishing industry using product market definitions that distinguish between trade book publishing (which encompasses both fiction and non-fiction titles marketed to general consumers) and other categories such as educational publishing. In the Kestrel Industries/Brightmoor & Co. matter, the DOJ defined a relevant market for the acquisition of publishing rights to anticipated top-selling books, focusing on competition among publishers for authors and manuscripts. While the precise market definition applied by the DOJ in reviewing this transaction may differ, the key point is that these are well-established, fragmented industries with numerous competitors across each segment.

Geographic Market. The relevant geographic market for trade book publishing and academic publishing is generally considered to be the United States and Canada (North America), reflecting the fact that English-language publishers compete across the entire North American market. For certain aspects of the publishing business, such as rights licensing, the geographic market may be global, as US publishers routinely compete with publishers in the United Kingdom, Australia, and other English-language markets for the acquisition of translation rights and international distribution rights. For purposes of this analysis, we consider the primary geographic market to be North America, with global considerations for rights licensing.

B. Competitive Landscape

Book Publishing. The US book publishing industry is highly fragmented, notwithstanding the existence of several large publishers. The "Big Five" publishers — Kestrel Industries, Northpoint Holdings, Brightmoor & Co. (recently acquired by Tarrant Equity Partners), Larkspur Enterprises, and Marlowe Group — account for a meaningful but not dominant share of total trade book revenue. Beyond the Big Five, the market includes hundreds of mid-size and independent publishers, as well as a rapidly growing self-publishing segment facilitated by platforms such as Severin Data Systems, Cascade Services Inc., and others. Total US book publishing revenue was estimated at approximately $28–30 billion in FY2023 across all formats and categories.

MPH/Meridian Press, with FY2023 consolidated revenue of approximately $1.14 billion across all segments, holds an estimated mid-single-digit percentage market share of the overall US book publishing market. While Meridian Press is a substantial publisher with recognized imprints, it is significantly smaller than the largest industry participants and competes in a market characterized by ease of entry at the lower end and vigorous competition among established publishers for top-selling authors and manuscripts.

Academic/Educational Publishing. The academic and educational publishing segment, served by MPH through Bellweather Academic Press, is somewhat more concentrated than trade book publishing, with major participants including Stonefield Partners LLC, Halcyon Corporation, Tarrant Corporation, Cobalt Ridge & Co., Ashford Industries, and Ridgeway Industries. However, the segment also includes numerous mid-size and niche publishers specializing in particular academic disciplines. Bellweather Academic occupies a mid-tier position in this market and competes across multiple academic disciplines. The academic publishing market is also undergoing structural change, with increasing adoption of open-access publishing models and digital platforms.

Periodical Publishing. The periodicals segment, served by MPH through Foxglove Media LLC (Foxglove Periodicals), is a declining and highly fragmented market. Print periodical circulation has experienced sustained declines over the past two decades, and the periodicals market is characterized by a large number of publishers serving diverse niche audiences. Foxglove's portfolio of approximately 18 active periodical titles represents a very small share of this fragmented market.

Distribution Services. Meridian Distribution Services Inc. operates 14 distribution centers across North America and provides warehousing, fulfillment, and distribution services. Physical book distribution is competitive, with numerous third-party providers including Meridian Corporation (which is the dominant third-party distributor in the US market), Cobalt Ridge & Co., and various specialized distribution companies. MPH's distribution operations primarily serve its own publishing subsidiaries and are not a primary competitive concern in this transaction.

C. Buyer's Existing Portfolio — Overlap Analysis

The most critical factor in assessing the substantive antitrust risk of the proposed transaction is the extent to which the acquiring person's existing business operations overlap with those of the target. This analysis focuses on horizontal overlaps (competition in the same product and geographic markets) and vertical relationships (supplier-customer or other upstream/downstream relationships that could create foreclosure risks).

Horizontal Overlaps. Pinnacle Ridge Capital Partners Fund IV, L.P. is a financial buyer (private equity sponsor) whose investment mandate focuses on media, information services, and business services. Based on publicly available information regarding PRCP IV's portfolio and representations made by Buyer's counsel (Graham Ashworth, Hathaway, Locke & Barnett LLP), PRCP IV does not currently own or control any portfolio company engaged in book publishing, periodical publishing, academic/educational content publishing, or physical book distribution. Accordingly, there are no horizontal overlaps between PRCP IV's existing portfolio and MPH's publishing operations.

PRCP IV's nine existing platform investments are in sectors that, while adjacent to media and content, do not compete directly with MPH. These investments are in areas such as digital marketing services, data analytics, specialized business-to-business information services, and professional services — none of which involves the creation, editing, marketing, or distribution of books, periodicals, or academic content in the traditional sense.

Vertical Relationships. We have also considered whether PRCP IV's existing portfolio includes any companies that operate upstream (e.g., authorship, content creation, literary agency) or downstream (e.g., retail book sales, library procurement, institutional purchasing) from MPH's publishing operations. Based on our review, no such vertical relationships exist. Pinnacle Ridge does not control upstream content-creation assets or downstream retail distribution channels that would create foreclosure risks or raise concerns about the Buyer's ability and incentive to disadvantage MPH's competitors.

Conclusion. The transaction does not present horizontal overlaps or vertical concerns that would raise substantive antitrust issues. This is a straightforward financial-buyer acquisition of a target operating in a fragmented industry, and the competitive structure of the relevant markets will not be materially altered by the transaction.

D. Assessment of Second Request Risk

A Second Request is a formal demand issued by either the FTC or the DOJ under Section 7A(e) of the Clayton Act, requiring the parties to produce extensive documentary materials and respond to detailed interrogatories prior to the expiration of an extended waiting period. Receipt of a Second Request is a significant event that substantially increases the cost, duration, and complexity of the pre-merger review process, and is typically reserved for transactions that raise meaningful competitive concerns.

Based on the following factors, we assess the risk of a Second Request as very low:

(a) Absence of Horizontal Overlaps. As detailed above, Pinnacle Ridge has no existing portfolio companies in the publishing industry. The absence of horizontal overlaps is the most significant factor weighing against a Second Request, as the reviewing agency will have no basis to conclude that the transaction would eliminate competition between the merging parties.

(b) Fragmented Industry Structure. The book publishing, academic publishing, and periodical publishing industries are characterized by a large number of competitors, low barriers to entry at the smaller end of the market, and vigorous competition among established players. MPH holds a mid-single-digit market share in overall book publishing, which does not suggest market dominance or a transaction that would create a firm with the ability to exercise unilateral market power.

(c) Financial Buyer Profile. The DOJ and FTC have historically been less likely to challenge acquisitions by financial buyers (i.e., private equity sponsors) that do not present horizontal overlaps, as compared to strategic acquisitions by competitors in the same industry. While the agencies have in recent years increased scrutiny of certain private equity acquisitions (particularly serial acquisitions or "roll-up" strategies in concentrated industries), this transaction does not present the hallmarks of a problematic PE acquisition.

(d) No Pending Investigations. We are not aware of any pending DOJ or FTC investigations in the book publishing, academic publishing, or periodical publishing sectors that would complicate or delay the review of this transaction. The DOJ's challenge to the Kestrel Industries/Brightmoor & Co. merger was resolved in 2022 and involved fundamentally different competitive dynamics (a merger between two of the "Big Five" publishers).

We are not aware of any other industry-specific or transaction-specific factors that would elevate the risk of extended regulatory review. Accordingly, we recommend requesting early termination and expect it to be granted.

E. Overall Substantive Risk Rating

Low. Based on the totality of the analysis set forth above, we do not anticipate that the DOJ Antitrust Division or the Canadian Competition Bureau will challenge or impose conditions on this transaction. The absence of horizontal overlaps, the fragmented structure of the relevant markets, and the financial-buyer profile of Pinnacle Ridge all weigh strongly in favor of expeditious regulatory clearance. We recommend proceeding with the HSR and Canadian filings on the timeline set forth in this memorandum and do not believe that the antitrust review process will present a material obstacle to closing.

VI. CFIUS Analysis

A. Overview of CFIUS Jurisdiction

The Committee on Foreign Investment in the United States ("CFIUS") is an interagency committee of the US government that reviews certain transactions involving foreign persons that could result in foreign control of, or certain other investments in, US businesses. CFIUS has the authority to review, modify, and potentially block or unwind transactions that threaten national security.

CFIUS jurisdiction was significantly expanded under the Foreign Investment Risk Review Modernization Act of 2018 ("FIRRMA"), which was implemented through final regulations at 31 C.F.R. Parts 800 and 802. Under FIRRMA, CFIUS has jurisdiction over two categories of "covered transactions": (i) transactions that could result in foreign control of a US business (traditional covered control transactions, governed by 31 C.F.R. Part 800); and (ii) certain non-controlling investments by foreign persons in US businesses that are involved in critical technologies, critical infrastructure, or the maintenance or collection of sensitive personal data of US citizens ("TID US businesses," also governed by 31 C.F.R. Part 800). FIRRMA also introduced mandatory filing requirements for certain transactions involving TID US businesses.

B. Application to This Transaction

Acquiring Person. Ridgeline Publishing Acquisition Corp. is a Delaware corporation to be formed as a portfolio company of Pinnacle Ridge Capital Partners Fund IV, L.P., a Delaware limited partnership managed by Pinnacle Ridge Capital Management LLC. Pinnacle Ridge Capital Management LLC is a US-domiciled entity headquartered at 600 Lexington Avenue, New York, NY 10022. The Managing Partner of Pinnacle Ridge, Victor Stanhope, is a US person. The general partner of PRCP IV, Pinnacle Ridge Capital GP IV LLC, is also a US entity. Based on publicly available information and representations of Buyer's counsel, the limited partners of PRCP IV are predominantly US-based institutional investors (pension funds, endowments, and insurance companies), although the specific composition of the limited partner base has not been independently verified for purposes of this analysis.

Critically, for CFIUS purposes, the acquiring person in this transaction is Pinnacle Ridge/Ridgeline — a US-domiciled private equity fund and its US-incorporated acquisition vehicle. CFIUS jurisdiction is triggered by the identity and nationality of the acquiring person, not the selling person. Because the acquiring person is a US person, the transaction does not constitute a "covered control transaction" involving a foreign person and does not fall within CFIUS's jurisdiction over control transactions.

Selling Person. Aurelius Global Media Group PLC is a UK-headquartered public limited company. However, in the context of a sale transaction, CFIUS jurisdiction is analyzed by reference to whether a foreign person is acquiring control of, or making a covered investment in, a US business. The nationality of the seller is not the jurisdictional trigger. Aurelius is divesting its interest in MPH, not acquiring a US business. Accordingly, Aurelius's UK domicile does not trigger CFIUS jurisdiction.

TID US Business Analysis. Even in cases where the acquiring person is a foreign person (which is not the case here), CFIUS jurisdiction over non-controlling investments is limited to investments in "TID US businesses" — i.e., US businesses that are involved in (i) critical technologies, (ii) critical infrastructure, or (iii) sensitive personal data. We have analyzed MPH's business against each of these categories:

(i) Critical Technologies. MPH's business operations (book publishing, academic content, periodical publishing, physical distribution) do not involve the production, design, testing, manufacturing, fabrication, or development of any critical technology, including items controlled under the International Traffic in Arms Regulations ("ITAR"), the Export Administration Regulations ("EAR"), or technologies identified as emerging or foundational technologies pursuant to Section 1758 of the Export Control Reform Act of 2018. MPH does not hold any export control licenses or engage in defense-related or dual-use technology activities.

(ii) Critical Infrastructure. MPH does not own, operate, supply, or service any critical infrastructure within the meaning of 31 C.F.R. § 800.212, which covers specific sectors and subsectors such as telecommunications, energy, transportation, financial services, and defense industrial base. Book publishing and distribution do not fall within any covered infrastructure sector.

(iii) Sensitive Personal Data. MPH does not maintain or collect substantial quantities of sensitive personal data of US persons within the meaning of 31 C.F.R. § 800.241. While MPH may maintain certain customer data (e.g., subscriber information for periodicals, purchaser information for direct-to-consumer sales), such data does not include the categories of sensitive personal data that trigger CFIUS jurisdiction, such as financial data, health data, geolocation data, or genetic information, in quantities exceeding the regulatory thresholds.

Conclusion. The proposed transaction does not involve a foreign acquiring person and does not involve a TID US business. Accordingly, no CFIUS filing — whether mandatory or voluntary — is required. We recommend that no CFIUS notice or declaration be submitted in connection with this transaction.

We note, for completeness, that even if CFIUS jurisdiction were arguably implicated — for example, if there were a question regarding the composition of PRCP IV's limited partner base and whether any foreign limited partner could be deemed to exercise control or influence over the fund's investment decisions — the target's business (book publishing and distribution) does not implicate national security concerns, and the probability of CFIUS intervention would be negligible. We will document this analysis in the matter file for the record.

VII. Other Foreign Investment and Antitrust Jurisdictions

We have also considered whether the proposed transaction may trigger antitrust or foreign investment filing requirements in jurisdictions outside the United States and Canada. Based on MPH's revenue footprint, which is predominantly concentrated in the United States and Canada, no additional filings have been identified as required.

European Union (EU Merger Regulation). The EU Merger Regulation (Council Regulation (EC) No. 139/2004) requires pre-merger notification to the European Commission for transactions meeting specified turnover thresholds. Under Article 1(2), a concentration has a Community dimension where: (a) the combined aggregate worldwide turnover of all the undertakings concerned exceeds €5 billion; and (b) the aggregate Community-wide turnover of each of at least two of the undertakings concerned exceeds €250 million each, unless each of the undertakings concerned achieves more than two-thirds of its aggregate Community-wide turnover within one and the same Member State.

While Aurelius's consolidated global revenue (approximately £3.8 billion, or approximately €4.4 billion) is substantial, it does not alone exceed the €5 billion worldwide threshold, and PRCP IV's portfolio revenues would need to be aggregated to determine whether the combined worldwide turnover threshold is met. More significantly, MPH's EU-specific revenues are minimal, given the predominantly North American focus of MPH's publishing and distribution operations. MPH does not maintain material operations, subsidiaries, or revenue-generating activities within the European Union. Accordingly, we do not expect that the EU turnover thresholds are met, and no EU merger control filing is required. We will confirm this assessment upon receipt of detailed geographic revenue breakdowns from MPH's finance team.

United Kingdom (Competition and Markets Authority). The UK merger control regime administered by the Competition and Markets Authority ("CMA") is a voluntary notification system, but the CMA retains the authority to "call in" and investigate completed or anticipated mergers that meet the jurisdictional tests. The CMA may assert jurisdiction where: (a) the target has UK turnover exceeding £70 million (the "turnover test"); or (b) the merger results in the creation or enhancement of a share of supply of at least 25% in the UK (the "share of supply test"). MPH has negligible UK revenue, as its operations are focused on the North American market. Meridian Press does not have a UK subsidiary or material UK operations. Accordingly, we do not anticipate that the CMA's jurisdictional thresholds are met, and no UK filing is anticipated or recommended. We note, however, that the CMA has shown a willingness to assert jurisdiction over transactions with limited UK nexus in certain circumstances, and we will monitor for any indication that the CMA intends to intervene.

Other Jurisdictions. Based on MPH's revenue footprint, no other foreign antitrust or foreign investment filings have been identified as required. We have considered the following jurisdictions, among others, and concluded that the applicable thresholds are not met based on available information:

• Germany (Bundeskartellamt): German merger control thresholds require combined worldwide turnover exceeding €500 million and at least one party with domestic turnover exceeding €50 million, with the other party's domestic turnover exceeding €17.5 million. MPH does not have material German revenue.

• Australia (ACCC): Australia's merger control regime is voluntary, and mandatory notification is not required. MPH does not have material Australian operations.

• Brazil (CADE): Brazilian merger control thresholds require at least one group with Brazilian revenue exceeding BRL 750 million. MPH does not have material Brazilian revenue.

• China (SAMR): Chinese merger control thresholds require that at least two parties have Chinese turnover exceeding RMB 400 million each. MPH does not have material Chinese revenue.

• Japan (JFTC): Japanese merger control thresholds require that the acquiring group and the target group each have domestic turnover exceeding specified yen-denominated thresholds. MPH does not have material Japanese revenue.

We will confirm with the client that MPH does not generate material revenue in any other jurisdiction that could trigger filing obligations. In particular, we will request a detailed geographic revenue breakdown from Angela Moretti, SVP Finance of MPH, to verify that no filing thresholds are triggered in any jurisdiction not addressed above.

VIII. Recommended Action Items and Timeline

Based on the analysis set forth in this memorandum, we recommend the following action items:

1. Prepare HSR Notification Forms. Coordinate with Aurelius (Thomas Whitfield, SVP Corporate Development; Claudia Restrepo, Associate General Counsel) and Haverford Whitmore & Co. (Catherine Liang, Managing Director) to gather all required financial and documentary information for the HSR Notification and Report Forms. This includes the preparation and review of Item 4(c) and 4(d) document productions, compilation of revenue data by NAICS and SIC codes, identification of overlapping products and services (if any), and completion of the financial schedules required by the form. Target completion of draft filings by mid-May 2024.

2. Submit HSR Filings. Target filing date of May 20, 2024, following execution of the LOI or Term Sheet and completion of document collection. The filing fee of $280,150 is to be paid by the Buyer (Pinnacle Ridge/Ridgeline) pursuant to the anticipated terms of the MIPA. We will request early termination of the 30-day waiting period simultaneously with the filing.

3. Prepare Canadian Competition Act Notification. Coordinate with Meridian Press Canada ULC (Jonathan Kessler, President of MPH; Angela Moretti, SVP Finance) to gather Canadian-specific financial data, including revenue and asset figures for Meridian Press Canada ULC, necessary to complete the Canadian notification form and to confirm that the size-of-transaction threshold is met. Target filing in late May 2024, in coordination with the HSR filing.

4. Monitor HSR Review. Following submission of the HSR filings, maintain regular contact with DOJ Antitrust Division staff as appropriate. Respond promptly to any informal requests for information or "pull-and-refile" suggestions from the Premerger Notification Office. Based on our competitive assessment, we do not anticipate a Second Request, but we will remain vigilant and prepared to respond to any developments.

5. CFIUS — No Action Required. Document the CFIUS analysis set forth in this memorandum in the matter file for the record. No CFIUS filing, notice, or declaration is required.

6. Closing Condition Drafting. Ensure that the MIPA includes customary closing conditions requiring: (i) the expiration or early termination of the HSR Act waiting period (or, in the event of a Second Request, substantial compliance with such request and subsequent expiration of the extended waiting period); and (ii) receipt of clearance under the Canadian Competition Act (whether by expiration of the waiting period, issuance of an Advance Ruling Certificate, or receipt of a no-action letter from the Commissioner). No CFIUS-related closing condition is needed.

7. Antitrust Covenant in MIPA. Include a customary covenant in the MIPA addressing the parties' respective obligations to obtain the required antitrust approvals. The appropriate standard — whether "hell or high water," "reasonable best efforts," or a more tailored formulation — should be discussed with the deal team in light of the low antitrust risk profile of the transaction. Given the financial-buyer nature of the acquisition and the low risk of regulatory challenge, Buyer may resist a "hell or high water" commitment; however, a "reasonable best efforts" covenant should be sufficient and is consistent with market practice for transactions of this risk profile. We will advise separately on the specific drafting of the regulatory efforts covenant and the reverse termination fee provisions, if any, relating to regulatory failure.

8. Ongoing Coordination. Derek Okonkwo will serve as the primary Calderwood & Harkness contact for all antitrust filing matters. We will coordinate with Buyer's counsel (Graham Ashworth, Hathaway, Locke & Barnett LLP) on all aspects of filing logistics, document production, and agency engagement, and will provide regular updates to the deal team as the regulatory review process progresses.

IX. Conclusion

In summary, the proposed sale of Meridian Press Holdings LLC by Aurelius Media Holdings Inc. to Ridgeline Publishing Acquisition Corp. requires pre-merger notification under two regulatory regimes: (i) the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (filing fee of $280,150, to be borne by the Buyer); and (ii) Part IX of the Canadian Competition Act (filing fee of CAD $75,000, allocation to be addressed in the MIPA).

No CFIUS filing is required, as the acquiring person is a US-domiciled private equity fund and the target's business does not implicate national security considerations. No other foreign antitrust or foreign investment filings have been identified as required based on MPH's predominantly North American revenue footprint.

The substantive antitrust risk associated with this transaction is assessed as low. The proposed transaction involves a financial buyer with no existing portfolio companies in the publishing industry, acquiring a target operating in fragmented markets. We expect early termination of the HSR waiting period and unconditional clearance under the Canadian Competition Act.

We recommend targeting the HSR filing by May 20, 2024, with an expected early termination date in late June 2024, and a Canadian filing in parallel with clearance targeted by late July 2024. These timelines are consistent with the anticipated transaction signing in July 2024 and target closing in November 2024. We do not anticipate that the antitrust review process will present a material impediment to the closing of this transaction.

We are available to discuss this analysis at your convenience and will proceed with preparation of the HSR and Canadian filings upon your authorization.

Respectfully submitted,

CALDERWOOD & HARKNESS LLP

By: ________

Derek Okonkwo Working Associate, Mergers & Acquisitions 425 Park Avenue New York, NY 10022

Distribution:

Beatrice Holloway — Responsible Partner, Mergers & Acquisitions

Megan Chu — Lead Associate, Mergers & Acquisitions

James Prentice — Billing Partner, Mergers & Acquisitions

Matter File: 1043-00002

This memorandum is a privileged and confidential attorney-client communication and attorney work product prepared in anticipation of litigation or in connection with the provision of legal advice. It is intended solely for the use of the addressee and those identified in the distribution list. Any unauthorized disclosure, copying, or distribution of this memorandum or its contents is strictly prohibited.

Milestone	Target Date
LOI / Term Sheet execution	~May 3, 2024
HSR filing submission	~May 20, 2024
Waiting period commencement (acceptance of both filings)	~May 22–24, 2024
Expected early termination or natural expiration of waiting period	Late June 2024 (~June 28, 2024)
If Second Request issued (considered unlikely)	Timeline would extend by 3–6+ months

MEMORANDUM
PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT
TO: Beatrice Holloway, Responsible Partner, Mergers & Acquisitions
FROM: Derek Okonkwo, Working Associate, Mergers & Acquisitions
DATE: April 22, 2024
RE: Antitrust and Regulatory Filing Requirements — Proposed Sale of Meridian Press Holdings LLC
Matter No.: 1043-00002
CLIENT: Aurelius Global Media Group PLC
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I. Executive Summary
Calderwood & Harkness LLP represents Aurelius Global Media Group PLC ("Aurelius" or "AGMG") in connection with the proposed carve-out and sale of 100% of the membership interests in Meridian Press Holdings LLC ("MPH" or "Meridian Press") by Aurelius Media Holdings Inc. ("AMH"), a wholly owned Delaware subsidiary of Aurelius, to Ridgeline Publishing Acquisition Corp. ("Ridgeline" or "Buyer"), a newly formed acquisition vehicle of Pinnacle Ridge Capital Partners Fund IV, L.P. ("PRCP IV" or "Pinnacle Ridge"). The aggregate enterprise value of the proposed transaction is $480,000,000. This memorandum analyzes all antitrust and foreign investment regulatory filing requirements applicable to the transaction and assesses the substantive antitrust risk profile of the proposed sale.
Based on our analysis of the applicable regulatory regimes and the competitive characteristics of the transaction, our conclusions are as follows:
Hart-Scott-Rodino Act. A pre-merger notification filing is required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"). Both the size-of-transaction and size-of-person thresholds are satisfied. The applicable filing fee is $280,150, which is to be borne by the Buyer pursuant to the anticipated terms of the definitive agreement (the Membership Interest Purchase Agreement, or "MIPA"). We recommend that early termination of the statutory 30-day waiting period be requested concurrently with the filing. Based on the competitive profile of the transaction, we assess the substantive antitrust risk as low and expect that early termination will be granted within approximately four to six weeks of filing.
Canadian Competition Act. A pre-merger notification is required under Part IX of the Canadian Competition Act (R.S.C. 1985, c. C-34) due to the inclusion in the transaction of Meridian Press Canada ULC, an unlimited liability company organized under the laws of British Columbia, which is a direct subsidiary of MPH and maintains operations in Toronto and Vancouver. We expect clearance to be obtained without conditions, given the absence of competitive overlaps in the Canadian market.
CFIUS. No filing is required under the Committee on Foreign Investment in the United States ("CFIUS") regime. The transaction does not involve a foreign acquiring person — Pinnacle Ridge is a US-domiciled private equity fund — and MPH does not constitute a "TID US business" within the meaning of the Foreign Investment Risk Review Modernization Act of 2018 ("FIRRMA"). No mandatory or voluntary CFIUS filing is warranted.
Other Jurisdictions. Based on MPH's revenue footprint, which is predominantly concentrated in the United States and Canada, no other foreign antitrust or foreign investment filings have been identified as required. We address the EU Merger Regulation and UK Competition and Markets Authority regimes below and conclude that neither is triggered.
Overall Antitrust Risk Assessment: Low. We do not anticipate that either the U.S. Department of Justice Antitrust Division or the Canadian Competition Bureau will challenge or impose conditions on this transaction.
II. Transaction Overview
The following summarizes the material terms and parties relevant to this antitrust and regulatory analysis.
Seller. Aurelius Media Holdings Inc. is a Delaware corporation (Secretary of State file no. 5987324) and a wholly owned US holding subsidiary of Aurelius Global Media Group PLC, a public limited company organized under the laws of England and Wales (Companies House No. 08431276). AMH was established as the US holding company for Aurelius's North American media assets and directly owns 100% of the membership interests in MPH.
Target. Meridian Press Holdings LLC is a Delaware limited liability company (Secretary of State file no. 4521889) that is treated as a disregarded entity for US federal income tax purposes. MPH is directly owned by AMH. MPH serves as the holding company for the Meridian Press group of companies and, through its operating subsidiaries, conducts the business being acquired.
Target's Key Subsidiaries Included in the Carve-Out. The following entities are direct or indirect subsidiaries of MPH and are included in the proposed transaction:
• Meridian Distribution Services Inc. — a Delaware corporation (file no. 4736201) that operates 14 distribution centers across North America responsible for the warehousing, fulfillment, and physical distribution of books and periodicals published by the Meridian Press group and, to a limited extent, third-party publishers.
• Bellweather Academic Press Inc. — a Delaware corporation (file no. 4801133) that publishes academic and educational content, including textbooks, scholarly journals, and reference materials, primarily marketed to universities, libraries, and educational institutions in the United States.
• Foxglove Media LLC — a New York limited liability company that publishes periodicals and magazines under the Foxglove Periodicals brand, including a portfolio of approximately 18 active print and digital periodical titles.
• Meridian Press Canada ULC — an unlimited liability company organized under the laws of British Columbia, with leased office and warehouse facilities in Toronto, Ontario, and Vancouver, British Columbia, responsible for the distribution, marketing, and sale of Meridian Press publications in the Canadian market.
Buyer. Ridgeline Publishing Acquisition Corp. is a Delaware corporation to be incorporated as the direct purchaser of the membership interests in MPH. Ridgeline will serve as the acquisition vehicle and portfolio company of Pinnacle Ridge Capital Partners Fund IV, L.P. (Delaware limited partnership, file no. 6234577), a private equity fund managed by Pinnacle Ridge Capital Management LLC. The general partner of PRCP IV is Pinnacle Ridge Capital GP IV LLC.
Transaction Structure. The proposed transaction is structured as a sale of 100% of the membership interests in MPH by AMH to Ridgeline. Upon consummation, Ridgeline will own 100% of MPH and all of its direct and indirect subsidiaries, including the four subsidiaries enumerated above.
Enterprise Value. The aggregate enterprise value of the proposed transaction is $480,000,000. The equity purchase price and related adjustments (including working capital adjustments, indebtedness, and transaction expenses) will be set forth in the definitive MIPA.
Financial Advisors. Drummond Zanthor Partners LLC is serving as financial advisor to the Buyer. Haverford Whitmore & Co. is serving as financial advisor to the Seller.
Business of the Target. MPH, through its subsidiaries, operates across three principal lines of business: (i) trade and mass-market book publishing under the Meridian Books imprint; (ii) academic and educational content publishing under the Bellweather Academic brand; and (iii) periodical publishing under the Foxglove Periodicals brand. The Meridian Press group also operates a physical distribution network through Meridian Distribution Services Inc., which maintains 14 distribution centers located across the United States and Canada. As of the end of fiscal year 2023, MPH employed approximately 2,400 persons across all subsidiaries and locations. MPH's consolidated revenue for FY2023 was approximately $1,140,000,000, with Adjusted EBITDA of approximately $96,000,000, representing an Adjusted EBITDA margin of approximately 8.4%.
Buyer's Existing Portfolio. PRCP IV is a $6.2 billion middle-market private equity fund with an investment mandate focused on media, information services, and business services. To date, Fund IV has deployed approximately $2.8 billion across nine platform investments. The acquisition of Meridian Press would represent the fund's largest single platform investment. Critically for antitrust purposes, no existing portfolio company of PRCP IV operates in the traditional book publishing, periodical publishing, or educational content publishing space. This assessment is based on publicly available information regarding PRCP IV's portfolio and representations made by Buyer's counsel, Graham Ashworth of Hathaway, Locke & Barnett LLP.
III. Hart-Scott-Rodino Act Analysis
A. Applicability and Jurisdictional Thresholds
The HSR Act (15 U.S.C. § 18a) and the implementing rules promulgated by the Federal Trade Commission at 16 C.F.R. Parts 801 through 803 require that parties to certain acquisitions of voting securities, assets, or non-corporate interests file a Notification and Report Form with both the FTC and the Antitrust Division of the U.S. Department of Justice prior to consummating the transaction. The obligation to file arises when specified jurisdictional thresholds are met and no exemption applies.
The proposed transaction involves the acquisition by Ridgeline (on behalf of Pinnacle Ridge/PRCP IV) of 100% of the membership interests in MPH, a Delaware limited liability company. Under 16 C.F.R. § 801.2(d), the acquisition of non-corporate interests (such as LLC membership interests) is treated as an acquisition of the assets of the LLC for HSR purposes when the acquirer will hold 100% of the interests. Accordingly, the proposed transaction is properly analyzed as an asset acquisition under the HSR rules, with the value of the transaction measured by reference to the enterprise value or purchase price.
Size-of-Transaction Test. The enterprise value of the proposed transaction is $480,000,000. Under the current (2024) HSR thresholds, as adjusted annually pursuant to Section 7A(a)(2) of the Clayton Act and published in the Federal Register, the minimum notification threshold is $111.4 million. The proposed transaction value of $480,000,000 substantially exceeds this threshold. Accordingly, the size-of-transaction test is satisfied.
Size-of-Person Test. Because the transaction value exceeds $111.4 million but does not exceed $500 million (the higher threshold above which the size-of-person test does not apply in 2024), the size-of-person test must also be met. Specifically, one party to the transaction must have total assets or annual net sales of at least $222.7 million, and the other party must have total assets or annual net sales of at least $22.3 million.
With respect to the acquired person, Aurelius Global Media Group PLC reported consolidated revenue of approximately £3.8 billion (approximately $4.8 billion at current exchange rates) for FY2023, and AMH and its subsidiaries, including MPH, had total assets well in excess of the applicable threshold. With respect to the acquiring person, Pinnacle Ridge Capital Partners Fund IV, L.P. has a total fund size of $6.2 billion, with total assets (including committed capital) substantially exceeding the $222.7 million threshold. Accordingly, the size-of-person test is satisfied for both parties.
Ultimate Parent Entity of the Acquiring Person. Identification of the correct "ultimate parent entity" (or "UPE") is essential to proper HSR compliance. Under 16 C.F.R. § 801.1(a)(3), the UPE is the entity that is not controlled by any other entity. For private equity fund structures, the analysis requires consideration of whether the fund's general partner, management company, or the fund itself constitutes the UPE, as well as the application of the "associate" rules.
In this case, Ridgeline Publishing Acquisition Corp. will be a direct subsidiary of PRCP IV. PRCP IV is a Delaware limited partnership whose general partner is Pinnacle Ridge Capital GP IV LLC. The fund is managed by Pinnacle Ridge Capital Management LLC. Under the FTC's guidance on private equity fund structures, the UPE is typically the fund itself (i.e., Pinnacle Ridge Capital Partners Fund IV, L.P.) or, in certain circumstances, the general partner entity. We will conduct a detailed analysis of the fund's limited partnership agreement to determine whether Pinnacle Ridge Capital GP IV LLC (the general partner) or PRCP IV itself is the appropriate UPE for filing purposes. Based on our preliminary review, we expect the UPE to be Pinnacle Ridge Capital Partners Fund IV, L.P. We will also analyze whether any "associate" relationships exist between PRCP IV and other Pinnacle Ridge-managed funds that could affect the filing analysis.
Ultimate Parent Entity of the Acquired Person. The UPE of the acquired person (the selling side) is Aurelius Global Media Group PLC, as the ultimate parent entity that controls AMH and, in turn, MPH, through a chain of direct and indirect ownership. Aurelius is a publicly traded company with no single controlling shareholder, and thus Aurelius itself serves as the UPE.
Conclusion. Based on the foregoing analysis, an HSR Act pre-merger notification filing is required for the proposed transaction.
B. Filing Mechanics
Filing Parties. Under the HSR Act and implementing rules, both the acquiring person and the acquired person are required to file separate Notification and Report Forms. The acquiring person is Pinnacle Ridge Capital Partners Fund IV, L.P. (through Ridgeline), and the acquired person is Aurelius Global Media Group PLC (through AMH). Each party's filing must include certain financial information, a description of the transaction, information regarding the parties' business operations, and, importantly, certain documentary attachments.
Filing Fee. The applicable filing fee for the proposed transaction is $280,150. Under the HSR Act's tiered fee schedule for 2024, as amended by the Merger Filing Fee Modernization Act of 2022, transactions valued above $161.5 million but not exceeding $500 million are subject to a filing fee of $280,150. The proposed enterprise value of $480,000,000 falls within this tier. Pursuant to the anticipated terms of the definitive MIPA, the filing fee is to be borne by the Buyer (Pinnacle Ridge/Ridgeline). Only one filing fee is required per transaction, regardless of the fact that both parties must file.
HSR Transaction Number. Our internal tracking systems have designated this filing as HSR Transaction Number 20241537. The official PNO Transaction Number will be assigned by the FTC upon acceptance of the filings.
Filing Timeline. We recommend targeting a filing date of approximately May 20, 2024, following the expected execution of the Letter of Intent or Term Sheet (anticipated in early May 2024) and completion of the Item 4(c) and 4(d) document collection and privilege review process. Under the HSR rules, the Notification and Report Form may be filed at any time after the parties have entered into a definitive agreement or, alternatively, a letter of intent. We note that the HSR rules permit filing based on a letter of intent or term sheet, provided it is sufficiently definitive to identify the parties, the structure, and the general terms of the proposed transaction.
Waiting Period. The statutory waiting period under the HSR Act is 30 calendar days from the date on which both filings are accepted by the FTC and the DOJ (i.e., certified as substantially complete by the Premerger Notification Office). During this period, the parties may not consummate the transaction. The waiting period may be terminated early by the reviewing agency (see below) or extended by the issuance of a Request for Additional Information and Documentary Material, commonly referred to as a "Second Request."
Early Termination. We recommend that both parties request early termination of the waiting period in their respective Notification and Report Forms. Under Section 7A(b)(2) of the Clayton Act, the FTC and DOJ have the authority to grant early termination prior to the expiration of the 30-day waiting period. The grant of early termination is published on the FTC's website. Based on the competitive profile of this transaction — a financial buyer with no horizontal overlaps acquiring a target in a fragmented industry — we anticipate that early termination will be granted, potentially within four to six weeks of the filing date. We note, however, that the FTC suspended the practice of granting early termination in February 2021, and subsequently reinstated it in limited form. As of the date of this memorandum, the agencies have resumed granting early termination on a case-by-case basis, and we expect that it will be available for this transaction.
Item 4(c) and 4(d) Documents. The HSR Notification and Report Form requires production of certain categories of documents that have been prepared by or for officers, directors, or, in the case of the acquired person, board members of the filing entity and that analyze the proposed transaction with respect to competition, competitors, markets, market shares, potential for sales growth, or expansion into new product or geographic markets. These documents, commonly referred to as "Item 4(c)" documents (relating to the specific transaction) and "Item 4(d)" documents (relating to competition in relevant markets, regardless of whether they reference the specific transaction), must be identified, collected, reviewed for privilege, and produced with the filing.
We are coordinating with the Aurelius internal team — specifically, Thomas Whitfield, SVP Corporate Development, and Priya Nandakumar, CFO — as well as with the Seller's financial advisor, Haverford Whitmore & Co. (Catherine Liang, Managing Director), to identify and collect all potentially responsive documents. We will conduct a thorough privilege review of these materials prior to production and will prepare a privilege log as necessary.
Given the size of the transaction and the involvement of a financial advisor, we anticipate that the Item 4(c) document production will include, at a minimum, the Confidential Information Memorandum prepared by Haverford Whitmore, management presentations prepared by MPH for prospective bidders, any board presentations or resolutions authorizing the sale, and internal analyses prepared by Aurelius regarding the competitive positioning of MPH. The scope of the Item 4(d) document production will depend on the extent to which MPH's officers and directors have created or received documents analyzing competitive dynamics in the publishing industry during the relevant time period (typically the twelve months preceding the filing).
Gun-Jumping Considerations. We take this opportunity to remind the client that prior to the expiration or early termination of the HSR waiting period, the parties to the proposed transaction must not consummate the acquisition and must continue to operate their respective businesses independently. The HSR Act's pre-merger notification requirements are designed to give the reviewing agencies an opportunity to evaluate the competitive effects of a proposed transaction before it is consummated. Any premature transfer of beneficial ownership, operational control, or competitively sensitive information may constitute "gun-jumping" in violation of Section 7A(a) of the Clayton Act, which carries civil penalties of up to $51,744 per day.
We recommend that the interim operating covenants in the MIPA be drafted with gun-jumping compliance in mind, particularly with respect to provisions that may grant the Buyer approval rights over the ordinary course conduct of MPH's business during the period between signing and closing. We will work with the deal team to ensure that the MIPA's interim operating covenants are appropriately tailored to permit the Seller to continue operating MPH independently while providing the Buyer with customary protections for the preservation of the business.
C. Expected Timeline
Based on our analysis and experience with transactions of this nature, we project the following timeline for the HSR process:
In the event that a Second Request is issued — a scenario that we assess as very unlikely based on the competitive profile of this transaction (see Section V below) — the parties would be required to produce extensive documentary materials and respond to detailed interrogatories. The issuance of a Second Request would extend the pre-closing antitrust timeline by a minimum of three to six months, and potentially longer, depending on the scope of the request and the pace of compliance. We address the risk of a Second Request in greater detail in Section V.D below.
D. Assigned Reviewing Agency
Transactions reported under the HSR Act are reviewed by either the FTC or the DOJ Antitrust Division pursuant to a clearance allocation process between the two agencies. The determination of which agency reviews a particular transaction is based on the agencies' respective expertise and historical practice in the relevant industry sector.
Publishing transactions, including recent high-profile matters in the book publishing industry, have historically been reviewed by the DOJ Antitrust Division rather than the FTC. We note, in particular, that the DOJ's 2022 challenge to the proposed Kestrel Industries/Brightmoor & Co. merger (which was ultimately blocked following a bench trial before the Honorable Florence Y. Pan of the United States District Court for the District of Columbia) confirmed the DOJ's active interest in and institutional expertise regarding the competitive dynamics of the book publishing industry.
Accordingly, we anticipate that the DOJ Antitrust Division will assert clearance over this transaction. This assessment is relevant to the substantive risk analysis in Section V, as the DOJ's enforcement priorities and analytical framework in the publishing sector are informed by the agency's experience in the Kestrel Industries matter.
IV. Canadian Competition Act Analysis
A. Applicability. MPH's subsidiary, Meridian Press Canada ULC, is an unlimited liability company organized under the laws of British Columbia, with leased office and warehouse locations in Toronto, Ontario, and Vancouver, British Columbia. Meridian Press Canada ULC is responsible for the distribution, marketing, and sale of Meridian Press publications in the Canadian market and employs approximately 85 persons across its two locations.
The Canadian Competition Act (R.S.C. 1985, c. C-34), as amended, requires pre-merger notification to the Commissioner of Competition for transactions that meet both the "size of parties" and "size of transaction" thresholds set forth in Part IX of the Act (Notifiable Transactions, Sections 109–123). Canada's merger notification regime is a mandatory, suspensory filing requirement, meaning that the parties may not close the transaction until the applicable waiting period has expired or clearance has been obtained.
Size of Parties Test. Under Section 109(1) of the Competition Act, the parties to a transaction (together with their affiliates) must have combined assets in Canada, or combined annual gross revenues from sales in, from, or into Canada, that exceed the applicable threshold. For 2024, this threshold is CAD $400 million. Aurelius Global Media Group PLC reported consolidated global revenue of approximately £3.8 billion (approximately CAD $6.5 billion at current exchange rates) for FY2023. Even if only a fraction of this revenue is derived from sales into or within Canada, the combined revenues of the parties to the transaction (including Aurelius's affiliates and Pinnacle Ridge's portfolio companies) are expected to substantially exceed the CAD $400 million threshold. Accordingly, the size-of-parties test is expected to be satisfied.
Size of Transaction Test. Under Section 110 of the Competition Act, the assets in Canada of the entity being acquired, or the annual gross revenues from sales in or from Canada generated from those assets, must exceed the applicable threshold. For 2024, this threshold is CAD $93 million. Meridian Press Canada ULC's Canadian operations must be assessed against this threshold. Based on preliminary due diligence information, MPH's overall North American distribution network — which includes distribution centers and operations serving the Canadian market — generates significant Canadian revenue. We note, however, that the precise figure for Canadian-specific revenues and assets requires confirmation. We are coordinating with Angela Moretti, SVP Finance of MPH, to obtain detailed financial data for Meridian Press Canada ULC and any other assets attributable to the Canadian operations. Based on MPH's total consolidated revenue of $1.14 billion and the scale of its Canadian operations, we believe it is likely (though not yet confirmed) that the Canadian revenues and/or assets attributable to MPH's Canadian business exceed the CAD $93 million threshold.
Conclusion. Pre-merger notification under Part IX of the Canadian Competition Act is expected to be required. We recommend filing promptly after, or concurrently with, the HSR filing in the United States.
B. Filing Mechanics and Timeline
Filing Form. Canada's merger notification system provides for two types of notification filings: a short-form notification and a long-form notification. The short-form notification requires less detailed information and is available when the competitive issues raised by a transaction are expected to be straightforward. Given the absence of horizontal overlaps between Pinnacle Ridge's portfolio and MPH's Canadian business, we expect that a short-form notification will be appropriate. However, if the Competition Bureau requests additional information, the parties may be required to provide a long-form filing or supplemental data.
Waiting Period. Upon the filing of a certified complete short-form notification, the applicable waiting period is 30 calendar days. The parties may not close the transaction during this waiting period unless the Commissioner of Competition issues an Advance Ruling Certificate ("ARC") or the waiting period expires without action. In the case of a long-form notification, the waiting period is also 30 calendar days from certified completion. The Commissioner may issue a supplementary information request, which effectively restarts the clock, though this step is typically reserved for transactions raising substantive competitive concerns.
Advance Ruling Certificate / No-Action Letter. To expedite the clearance process, we recommend that the parties simultaneously file the required notification and submit a request for an ARC or, alternatively, a "no-action" letter from the Commissioner of Competition. An ARC is issued when the Commissioner is satisfied that the proposed transaction would not be likely to result in a substantial prevention or lessening of competition. A no-action letter is a less formal mechanism by which the Commissioner advises the parties that she does not intend to challenge the transaction at the present time. Based on the competitive profile of this transaction, we believe that an ARC or no-action letter will be obtainable.
Expected Clearance Timeline. We anticipate that Canadian clearance will be obtained within four to eight weeks of the notification filing. Our target is to obtain clearance by late July 2024, which is consistent with the overall transaction timeline.
Filing Fee. The filing fee for a pre-merger notification under the Canadian Competition Act is CAD $75,000 (as of 2024). The allocation of this fee between the parties should be addressed in the definitive MIPA. Customary practice varies, but in many transactions, the fee is borne by the buyer or shared equally between the parties.
Substantive Risk in Canada. The substantive antitrust risk in Canada is assessed as low. The same competitive analysis that applies in the United States (see Section V below) is equally applicable in Canada: Pinnacle Ridge has no existing publishing operations in Canada, and the Canadian publishing market, while distinct in certain respects from the US market, is characterized by the presence of multiple competitors, including major international publishers with Canadian subsidiaries. We do not anticipate that the Commissioner of Competition will raise concerns regarding this transaction.
C. Coordination with HSR Filing
To ensure that the antitrust review process does not become a bottleneck in the transaction timeline, we recommend coordinating the timing of the Canadian notification with the HSR filing in the United States. Both filings should target submission by late May 2024, allowing for parallel review by the DOJ and the Canadian Competition Bureau. This coordinated approach will minimize the risk that one jurisdiction's review process delays the overall closing timeline.
We will coordinate with Buyer's counsel, Graham Ashworth of Hathaway, Locke & Barnett LLP, on the logistics of parallel filing, including the preparation of consistent factual descriptions and market analyses for use in both jurisdictions.
V. Substantive Antitrust Risk Assessment
A. Relevant Markets
The substantive antitrust analysis of the proposed transaction requires identification of the relevant product and geographic markets in which the merging parties compete or could potentially compete.
Product Markets. MPH's business encompasses three principal product categories: (i) trade and mass-market book publishing (Meridian Books imprint), including fiction and non-fiction titles for general readership; (ii) academic and educational publishing (Bellweather Academic Press), including textbooks, scholarly journals, and reference materials; and (iii) periodical publishing (Foxglove Periodicals), including a portfolio of approximately 18 print and digital periodical titles. In addition, MPH operates a physical distribution network through Meridian Distribution Services Inc., which provides warehousing, fulfillment, and distribution services for MPH's own publications and, to a limited extent, third-party publishers.
Each of these categories — book publishing, academic/educational publishing, periodical publishing, and distribution services — represents a potentially relevant product market for antitrust purposes. The DOJ has historically analyzed the book publishing industry using product market definitions that distinguish between trade book publishing (which encompasses both fiction and non-fiction titles marketed to general consumers) and other categories such as educational publishing. In the Kestrel Industries/Brightmoor & Co. matter, the DOJ defined a relevant market for the acquisition of publishing rights to anticipated top-selling books, focusing on competition among publishers for authors and manuscripts. While the precise market definition applied by the DOJ in reviewing this transaction may differ, the key point is that these are well-established, fragmented industries with numerous competitors across each segment.
Geographic Market. The relevant geographic market for trade book publishing and academic publishing is generally considered to be the United States and Canada (North America), reflecting the fact that English-language publishers compete across the entire North American market. For certain aspects of the publishing business, such as rights licensing, the geographic market may be global, as US publishers routinely compete with publishers in the United Kingdom, Australia, and other English-language markets for the acquisition of translation rights and international distribution rights. For purposes of this analysis, we consider the primary geographic market to be North America, with global considerations for rights licensing.
B. Competitive Landscape
Book Publishing. The US book publishing industry is highly fragmented, notwithstanding the existence of several large publishers. The "Big Five" publishers — Kestrel Industries, Northpoint Holdings, Brightmoor & Co. (recently acquired by Tarrant Equity Partners), Larkspur Enterprises, and Marlowe Group — account for a meaningful but not dominant share of total trade book revenue. Beyond the Big Five, the market includes hundreds of mid-size and independent publishers, as well as a rapidly growing self-publishing segment facilitated by platforms such as Severin Data Systems, Cascade Services Inc., and others. Total US book publishing revenue was estimated at approximately $28–30 billion in FY2023 across all formats and categories.
MPH/Meridian Press, with FY2023 consolidated revenue of approximately $1.14 billion across all segments, holds an estimated mid-single-digit percentage market share of the overall US book publishing market. While Meridian Press is a substantial publisher with recognized imprints, it is significantly smaller than the largest industry participants and competes in a market characterized by ease of entry at the lower end and vigorous competition among established publishers for top-selling authors and manuscripts.
Academic/Educational Publishing. The academic and educational publishing segment, served by MPH through Bellweather Academic Press, is somewhat more concentrated than trade book publishing, with major participants including Stonefield Partners LLC, Halcyon Corporation, Tarrant Corporation, Cobalt Ridge & Co., Ashford Industries, and Ridgeway Industries. However, the segment also includes numerous mid-size and niche publishers specializing in particular academic disciplines. Bellweather Academic occupies a mid-tier position in this market and competes across multiple academic disciplines. The academic publishing market is also undergoing structural change, with increasing adoption of open-access publishing models and digital platforms.
Periodical Publishing. The periodicals segment, served by MPH through Foxglove Media LLC (Foxglove Periodicals), is a declining and highly fragmented market. Print periodical circulation has experienced sustained declines over the past two decades, and the periodicals market is characterized by a large number of publishers serving diverse niche audiences. Foxglove's portfolio of approximately 18 active periodical titles represents a very small share of this fragmented market.
Distribution Services. Meridian Distribution Services Inc. operates 14 distribution centers across North America and provides warehousing, fulfillment, and distribution services. Physical book distribution is competitive, with numerous third-party providers including Meridian Corporation (which is the dominant third-party distributor in the US market), Cobalt Ridge & Co., and various specialized distribution companies. MPH's distribution operations primarily serve its own publishing subsidiaries and are not a primary competitive concern in this transaction.
C. Buyer's Existing Portfolio — Overlap Analysis
The most critical factor in assessing the substantive antitrust risk of the proposed transaction is the extent to which the acquiring person's existing business operations overlap with those of the target. This analysis focuses on horizontal overlaps (competition in the same product and geographic markets) and vertical relationships (supplier-customer or other upstream/downstream relationships that could create foreclosure risks).
Horizontal Overlaps. Pinnacle Ridge Capital Partners Fund IV, L.P. is a financial buyer (private equity sponsor) whose investment mandate focuses on media, information services, and business services. Based on publicly available information regarding PRCP IV's portfolio and representations made by Buyer's counsel (Graham Ashworth, Hathaway, Locke & Barnett LLP), PRCP IV does not currently own or control any portfolio company engaged in book publishing, periodical publishing, academic/educational content publishing, or physical book distribution. Accordingly, there are no horizontal overlaps between PRCP IV's existing portfolio and MPH's publishing operations.
PRCP IV's nine existing platform investments are in sectors that, while adjacent to media and content, do not compete directly with MPH. These investments are in areas such as digital marketing services, data analytics, specialized business-to-business information services, and professional services — none of which involves the creation, editing, marketing, or distribution of books, periodicals, or academic content in the traditional sense.
Vertical Relationships. We have also considered whether PRCP IV's existing portfolio includes any companies that operate upstream (e.g., authorship, content creation, literary agency) or downstream (e.g., retail book sales, library procurement, institutional purchasing) from MPH's publishing operations. Based on our review, no such vertical relationships exist. Pinnacle Ridge does not control upstream content-creation assets or downstream retail distribution channels that would create foreclosure risks or raise concerns about the Buyer's ability and incentive to disadvantage MPH's competitors.
Conclusion. The transaction does not present horizontal overlaps or vertical concerns that would raise substantive antitrust issues. This is a straightforward financial-buyer acquisition of a target operating in a fragmented industry, and the competitive structure of the relevant markets will not be materially altered by the transaction.
D. Assessment of Second Request Risk
A Second Request is a formal demand issued by either the FTC or the DOJ under Section 7A(e) of the Clayton Act, requiring the parties to produce extensive documentary materials and respond to detailed interrogatories prior to the expiration of an extended waiting period. Receipt of a Second Request is a significant event that substantially increases the cost, duration, and complexity of the pre-merger review process, and is typically reserved for transactions that raise meaningful competitive concerns.
Based on the following factors, we assess the risk of a Second Request as very low:
(a) Absence of Horizontal Overlaps. As detailed above, Pinnacle Ridge has no existing portfolio companies in the publishing industry. The absence of horizontal overlaps is the most significant factor weighing against a Second Request, as the reviewing agency will have no basis to conclude that the transaction would eliminate competition between the merging parties.
(b) Fragmented Industry Structure. The book publishing, academic publishing, and periodical publishing industries are characterized by a large number of competitors, low barriers to entry at the smaller end of the market, and vigorous competition among established players. MPH holds a mid-single-digit market share in overall book publishing, which does not suggest market dominance or a transaction that would create a firm with the ability to exercise unilateral market power.
(c) Financial Buyer Profile. The DOJ and FTC have historically been less likely to challenge acquisitions by financial buyers (i.e., private equity sponsors) that do not present horizontal overlaps, as compared to strategic acquisitions by competitors in the same industry. While the agencies have in recent years increased scrutiny of certain private equity acquisitions (particularly serial acquisitions or "roll-up" strategies in concentrated industries), this transaction does not present the hallmarks of a problematic PE acquisition.
(d) No Pending Investigations. We are not aware of any pending DOJ or FTC investigations in the book publishing, academic publishing, or periodical publishing sectors that would complicate or delay the review of this transaction. The DOJ's challenge to the Kestrel Industries/Brightmoor & Co. merger was resolved in 2022 and involved fundamentally different competitive dynamics (a merger between two of the "Big Five" publishers).
We are not aware of any other industry-specific or transaction-specific factors that would elevate the risk of extended regulatory review. Accordingly, we recommend requesting early termination and expect it to be granted.
E. Overall Substantive Risk Rating
Low. Based on the totality of the analysis set forth above, we do not anticipate that the DOJ Antitrust Division or the Canadian Competition Bureau will challenge or impose conditions on this transaction. The absence of horizontal overlaps, the fragmented structure of the relevant markets, and the financial-buyer profile of Pinnacle Ridge all weigh strongly in favor of expeditious regulatory clearance. We recommend proceeding with the HSR and Canadian filings on the timeline set forth in this memorandum and do not believe that the antitrust review process will present a material obstacle to closing.
VI. CFIUS Analysis
A. Overview of CFIUS Jurisdiction
The Committee on Foreign Investment in the United States ("CFIUS") is an interagency committee of the US government that reviews certain transactions involving foreign persons that could result in foreign control of, or certain other investments in, US businesses. CFIUS has the authority to review, modify, and potentially block or unwind transactions that threaten national security.
CFIUS jurisdiction was significantly expanded under the Foreign Investment Risk Review Modernization Act of 2018 ("FIRRMA"), which was implemented through final regulations at 31 C.F.R. Parts 800 and 802. Under FIRRMA, CFIUS has jurisdiction over two categories of "covered transactions": (i) transactions that could result in foreign control of a US business (traditional covered control transactions, governed by 31 C.F.R. Part 800); and (ii) certain non-controlling investments by foreign persons in US businesses that are involved in critical technologies, critical infrastructure, or the maintenance or collection of sensitive personal data of US citizens ("TID US businesses," also governed by 31 C.F.R. Part 800). FIRRMA also introduced mandatory filing requirements for certain transactions involving TID US businesses.
B. Application to This Transaction
Acquiring Person. Ridgeline Publishing Acquisition Corp. is a Delaware corporation to be formed as a portfolio company of Pinnacle Ridge Capital Partners Fund IV, L.P., a Delaware limited partnership managed by Pinnacle Ridge Capital Management LLC. Pinnacle Ridge Capital Management LLC is a US-domiciled entity headquartered at 600 Lexington Avenue, New York, NY 10022. The Managing Partner of Pinnacle Ridge, Victor Stanhope, is a US person. The general partner of PRCP IV, Pinnacle Ridge Capital GP IV LLC, is also a US entity. Based on publicly available information and representations of Buyer's counsel, the limited partners of PRCP IV are predominantly US-based institutional investors (pension funds, endowments, and insurance companies), although the specific composition of the limited partner base has not been independently verified for purposes of this analysis.
Critically, for CFIUS purposes, the acquiring person in this transaction is Pinnacle Ridge/Ridgeline — a US-domiciled private equity fund and its US-incorporated acquisition vehicle. CFIUS jurisdiction is triggered by the identity and nationality of the acquiring person, not the selling person. Because the acquiring person is a US person, the transaction does not constitute a "covered control transaction" involving a foreign person and does not fall within CFIUS's jurisdiction over control transactions.
Selling Person. Aurelius Global Media Group PLC is a UK-headquartered public limited company. However, in the context of a sale transaction, CFIUS jurisdiction is analyzed by reference to whether a foreign person is acquiring control of, or making a covered investment in, a US business. The nationality of the seller is not the jurisdictional trigger. Aurelius is divesting its interest in MPH, not acquiring a US business. Accordingly, Aurelius's UK domicile does not trigger CFIUS jurisdiction.
TID US Business Analysis. Even in cases where the acquiring person is a foreign person (which is not the case here), CFIUS jurisdiction over non-controlling investments is limited to investments in "TID US businesses" — i.e., US businesses that are involved in (i) critical technologies, (ii) critical infrastructure, or (iii) sensitive personal data. We have analyzed MPH's business against each of these categories:
(i) Critical Technologies. MPH's business operations (book publishing, academic content, periodical publishing, physical distribution) do not involve the production, design, testing, manufacturing, fabrication, or development of any critical technology, including items controlled under the International Traffic in Arms Regulations ("ITAR"), the Export Administration Regulations ("EAR"), or technologies identified as emerging or foundational technologies pursuant to Section 1758 of the Export Control Reform Act of 2018. MPH does not hold any export control licenses or engage in defense-related or dual-use technology activities.
(ii) Critical Infrastructure. MPH does not own, operate, supply, or service any critical infrastructure within the meaning of 31 C.F.R. § 800.212, which covers specific sectors and subsectors such as telecommunications, energy, transportation, financial services, and defense industrial base. Book publishing and distribution do not fall within any covered infrastructure sector.
(iii) Sensitive Personal Data. MPH does not maintain or collect substantial quantities of sensitive personal data of US persons within the meaning of 31 C.F.R. § 800.241. While MPH may maintain certain customer data (e.g., subscriber information for periodicals, purchaser information for direct-to-consumer sales), such data does not include the categories of sensitive personal data that trigger CFIUS jurisdiction, such as financial data, health data, geolocation data, or genetic information, in quantities exceeding the regulatory thresholds.
Conclusion. The proposed transaction does not involve a foreign acquiring person and does not involve a TID US business. Accordingly, no CFIUS filing — whether mandatory or voluntary — is required. We recommend that no CFIUS notice or declaration be submitted in connection with this transaction.
We note, for completeness, that even if CFIUS jurisdiction were arguably implicated — for example, if there were a question regarding the composition of PRCP IV's limited partner base and whether any foreign limited partner could be deemed to exercise control or influence over the fund's investment decisions — the target's business (book publishing and distribution) does not implicate national security concerns, and the probability of CFIUS intervention would be negligible. We will document this analysis in the matter file for the record.
VII. Other Foreign Investment and Antitrust Jurisdictions
We have also considered whether the proposed transaction may trigger antitrust or foreign investment filing requirements in jurisdictions outside the United States and Canada. Based on MPH's revenue footprint, which is predominantly concentrated in the United States and Canada, no additional filings have been identified as required.
European Union (EU Merger Regulation). The EU Merger Regulation (Council Regulation (EC) No. 139/2004) requires pre-merger notification to the European Commission for transactions meeting specified turnover thresholds. Under Article 1(2), a concentration has a Community dimension where: (a) the combined aggregate worldwide turnover of all the undertakings concerned exceeds €5 billion; and (b) the aggregate Community-wide turnover of each of at least two of the undertakings concerned exceeds €250 million each, unless each of the undertakings concerned achieves more than two-thirds of its aggregate Community-wide turnover within one and the same Member State.
While Aurelius's consolidated global revenue (approximately £3.8 billion, or approximately €4.4 billion) is substantial, it does not alone exceed the €5 billion worldwide threshold, and PRCP IV's portfolio revenues would need to be aggregated to determine whether the combined worldwide turnover threshold is met. More significantly, MPH's EU-specific revenues are minimal, given the predominantly North American focus of MPH's publishing and distribution operations. MPH does not maintain material operations, subsidiaries, or revenue-generating activities within the European Union. Accordingly, we do not expect that the EU turnover thresholds are met, and no EU merger control filing is required. We will confirm this assessment upon receipt of detailed geographic revenue breakdowns from MPH's finance team.
United Kingdom (Competition and Markets Authority). The UK merger control regime administered by the Competition and Markets Authority ("CMA") is a voluntary notification system, but the CMA retains the authority to "call in" and investigate completed or anticipated mergers that meet the jurisdictional tests. The CMA may assert jurisdiction where: (a) the target has UK turnover exceeding £70 million (the "turnover test"); or (b) the merger results in the creation or enhancement of a share of supply of at least 25% in the UK (the "share of supply test"). MPH has negligible UK revenue, as its operations are focused on the North American market. Meridian Press does not have a UK subsidiary or material UK operations. Accordingly, we do not anticipate that the CMA's jurisdictional thresholds are met, and no UK filing is anticipated or recommended. We note, however, that the CMA has shown a willingness to assert jurisdiction over transactions with limited UK nexus in certain circumstances, and we will monitor for any indication that the CMA intends to intervene.
Other Jurisdictions. Based on MPH's revenue footprint, no other foreign antitrust or foreign investment filings have been identified as required. We have considered the following jurisdictions, among others, and concluded that the applicable thresholds are not met based on available information:
• Germany (Bundeskartellamt): German merger control thresholds require combined worldwide turnover exceeding €500 million and at least one party with domestic turnover exceeding €50 million, with the other party's domestic turnover exceeding €17.5 million. MPH does not have material German revenue.
• Australia (ACCC): Australia's merger control regime is voluntary, and mandatory notification is not required. MPH does not have material Australian operations.
• Brazil (CADE): Brazilian merger control thresholds require at least one group with Brazilian revenue exceeding BRL 750 million. MPH does not have material Brazilian revenue.
• China (SAMR): Chinese merger control thresholds require that at least two parties have Chinese turnover exceeding RMB 400 million each. MPH does not have material Chinese revenue.
• Japan (JFTC): Japanese merger control thresholds require that the acquiring group and the target group each have domestic turnover exceeding specified yen-denominated thresholds. MPH does not have material Japanese revenue.
We will confirm with the client that MPH does not generate material revenue in any other jurisdiction that could trigger filing obligations. In particular, we will request a detailed geographic revenue breakdown from Angela Moretti, SVP Finance of MPH, to verify that no filing thresholds are triggered in any jurisdiction not addressed above.
VIII. Recommended Action Items and Timeline
Based on the analysis set forth in this memorandum, we recommend the following action items:
1. Prepare HSR Notification Forms. Coordinate with Aurelius (Thomas Whitfield, SVP Corporate Development; Claudia Restrepo, Associate General Counsel) and Haverford Whitmore & Co. (Catherine Liang, Managing Director) to gather all required financial and documentary information for the HSR Notification and Report Forms. This includes the preparation and review of Item 4(c) and 4(d) document productions, compilation of revenue data by NAICS and SIC codes, identification of overlapping products and services (if any), and completion of the financial schedules required by the form. Target completion of draft filings by mid-May 2024.
2. Submit HSR Filings. Target filing date of May 20, 2024, following execution of the LOI or Term Sheet and completion of document collection. The filing fee of $280,150 is to be paid by the Buyer (Pinnacle Ridge/Ridgeline) pursuant to the anticipated terms of the MIPA. We will request early termination of the 30-day waiting period simultaneously with the filing.
3. Prepare Canadian Competition Act Notification. Coordinate with Meridian Press Canada ULC (Jonathan Kessler, President of MPH; Angela Moretti, SVP Finance) to gather Canadian-specific financial data, including revenue and asset figures for Meridian Press Canada ULC, necessary to complete the Canadian notification form and to confirm that the size-of-transaction threshold is met. Target filing in late May 2024, in coordination with the HSR filing.
4. Monitor HSR Review. Following submission of the HSR filings, maintain regular contact with DOJ Antitrust Division staff as appropriate. Respond promptly to any informal requests for information or "pull-and-refile" suggestions from the Premerger Notification Office. Based on our competitive assessment, we do not anticipate a Second Request, but we will remain vigilant and prepared to respond to any developments.
5. CFIUS — No Action Required. Document the CFIUS analysis set forth in this memorandum in the matter file for the record. No CFIUS filing, notice, or declaration is required.
6. Closing Condition Drafting. Ensure that the MIPA includes customary closing conditions requiring: (i) the expiration or early termination of the HSR Act waiting period (or, in the event of a Second Request, substantial compliance with such request and subsequent expiration of the extended waiting period); and (ii) receipt of clearance under the Canadian Competition Act (whether by expiration of the waiting period, issuance of an Advance Ruling Certificate, or receipt of a no-action letter from the Commissioner). No CFIUS-related closing condition is needed.
7. Antitrust Covenant in MIPA. Include a customary covenant in the MIPA addressing the parties' respective obligations to obtain the required antitrust approvals. The appropriate standard — whether "hell or high water," "reasonable best efforts," or a more tailored formulation — should be discussed with the deal team in light of the low antitrust risk profile of the transaction. Given the financial-buyer nature of the acquisition and the low risk of regulatory challenge, Buyer may resist a "hell or high water" commitment; however, a "reasonable best efforts" covenant should be sufficient and is consistent with market practice for transactions of this risk profile. We will advise separately on the specific drafting of the regulatory efforts covenant and the reverse termination fee provisions, if any, relating to regulatory failure.
8. Ongoing Coordination. Derek Okonkwo will serve as the primary Calderwood & Harkness contact for all antitrust filing matters. We will coordinate with Buyer's counsel (Graham Ashworth, Hathaway, Locke & Barnett LLP) on all aspects of filing logistics, document production, and agency engagement, and will provide regular updates to the deal team as the regulatory review process progresses.
IX. Conclusion
In summary, the proposed sale of Meridian Press Holdings LLC by Aurelius Media Holdings Inc. to Ridgeline Publishing Acquisition Corp. requires pre-merger notification under two regulatory regimes: (i) the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (filing fee of $280,150, to be borne by the Buyer); and (ii) Part IX of the Canadian Competition Act (filing fee of CAD $75,000, allocation to be addressed in the MIPA).
No CFIUS filing is required, as the acquiring person is a US-domiciled private equity fund and the target's business does not implicate national security considerations. No other foreign antitrust or foreign investment filings have been identified as required based on MPH's predominantly North American revenue footprint.
The substantive antitrust risk associated with this transaction is assessed as low. The proposed transaction involves a financial buyer with no existing portfolio companies in the publishing industry, acquiring a target operating in fragmented markets. We expect early termination of the HSR waiting period and unconditional clearance under the Canadian Competition Act.
We recommend targeting the HSR filing by May 20, 2024, with an expected early termination date in late June 2024, and a Canadian filing in parallel with clearance targeted by late July 2024. These timelines are consistent with the anticipated transaction signing in July 2024 and target closing in November 2024. We do not anticipate that the antitrust review process will present a material impediment to the closing of this transaction.
We are available to discuss this analysis at your convenience and will proceed with preparation of the HSR and Canadian filings upon your authorization.
Respectfully submitted,
CALDERWOOD & HARKNESS LLP
By: ________
Derek Okonkwo Working Associate, Mergers & Acquisitions 425 Park Avenue New York, NY 10022
Distribution:
Beatrice Holloway — Responsible Partner, Mergers & Acquisitions
Megan Chu — Lead Associate, Mergers & Acquisitions
James Prentice — Billing Partner, Mergers & Acquisitions
Matter File: 1043-00002
This memorandum is a privileged and confidential attorney-client communication and attorney work product prepared in anticipation of litigation or in connection with the provision of legal advice. It is intended solely for the use of the addressee and those identified in the distribution list. Any unauthorized disclosure, copying, or distribution of this memorandum or its contents is strictly prohibited.
Milestone | Target Date
LOI / Term Sheet execution | ~May 3, 2024
HSR filing submission | ~May 20, 2024
Waiting period commencement (acceptance of both filings) | ~May 22–24, 2024
Expected early termination or natural expiration of waiting period | Late June 2024 (~June 28, 2024)
If Second Request issued (considered unlikely) | Timeline would extend by 3–6+ months

MEMORANDUM

PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP

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