1017-00006 · Aurelius Global Media Group · Regulatory

hsr-filing-cover-memo.docx DOCUMENT M&A / Corporate

26 / 40 ← → ✕

Contract analysis Extract to table

PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP 425 Park Avenue New York, NY 10022 Tel: (212) 558-4000

Fax: (212) 558-3588

Matter No. 1043-00002

MEMORANDUM

I. Executive Summary and Purpose

The purpose of this memorandum is to address the mechanics, timing, and logistical considerations for the required filing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, 15 U.S.C. § 18a (the "HSR Act"), and the rules promulgated thereunder by the Federal Trade Commission (the "FTC"), 16 C.F.R. Parts 801–803, in connection with the proposed sale of one hundred percent (100%) of the membership interests in Meridian Press Holdings LLC ("MPH"), a Delaware limited liability company (Delaware Division of Corporations file no. 4521889), by Aurelius Media Holdings Inc. ("AMH"), a Delaware corporation (Delaware Division of Corporations file no. 5987324), to Ridgeline Publishing Acquisition Corp. ("Ridgeline" or "Buyer"), a newly formed Delaware corporation to be organized as the acquisition vehicle for Pinnacle Ridge Capital Partners Fund IV, L.P. ("PRCP IV"), a Delaware limited partnership (Delaware Division of Corporations file no. 6234577) (the "Transaction").

The enterprise value of the Transaction is approximately $480,000,000, which clearly exceeds the applicable size-of-transaction threshold under the HSR Act for 2024. Accordingly, a pre-merger notification filing is required before the Transaction may be consummated. This memorandum analyzes the filing obligation, the applicable thresholds, the required documentary attachments and information, the anticipated filing timeline, the strategy for requesting early termination of the waiting period, and related regulatory considerations, including the required notification under the Canadian Competition Act and the inapplicability of the Committee on Foreign Investment in the United States ("CFIUS") review process.

The planned filing date for the HSR Notification and Report Forms is May 20, 2024 (Monday). The assigned HSR Transaction Number is 20241537. Both the acquiring person (PRCP IV) and the acquired person (Aurelius Global Media Group PLC, as described below) will file their respective notifications on or about that date to commence the statutory waiting period concurrently.

It should be noted that a Letter of Intent and Term Sheet (the "LOI") was executed by the parties on May 3, 2024, with an exclusivity period running through July 31, 2024. The definitive Membership Interest Purchase Agreement (the "MIPA") has not yet been circulated or executed. The filing is being prepared and submitted in advance of the anticipated definitive agreement in order to minimize timeline risk and to allow the waiting period to run during the period in which the definitive agreement is being negotiated. As discussed in Section IV.C below, the HSR Act permits the filing of a notification based on a good faith intention to consummate a transaction, and it is common practice to file prior to execution of the definitive agreement in circumstances such as these.

This memorandum should be read in conjunction with the Antitrust Risk Assessment Memorandum dated April 22, 2024 (the "Antitrust Risk Memo"), prepared by the undersigned and reviewed by Beatrice Holloway, which concluded that the substantive antitrust risk associated with the Transaction is low. The Antitrust Risk Memo analyzed the relevant product and geographic markets, competitive dynamics in the book publishing and educational content sectors, the absence of horizontal overlap between the acquiring person's portfolio and the target business, and the lack of vertical integration concerns. The conclusions of the Antitrust Risk Memo inform several of the strategic recommendations set forth herein, including the recommendation to request early termination of the waiting period.

II. Filing Obligation and Threshold Analysis

A. HSR Act Applicability

The HSR Act, 15 U.S.C. § 18a, requires that parties to certain acquisitions of voting securities, assets, or non-corporate interests file pre-merger notifications with the FTC and the Antitrust Division of the United States Department of Justice (the "DOJ") and observe a statutory waiting period before consummation of the proposed transaction. The purpose of the notification and waiting period is to provide the federal antitrust enforcement agencies with an opportunity to review proposed acquisitions and, where appropriate, to seek injunctive relief to prevent acquisitions that may substantially lessen competition or tend to create a monopoly in violation of Section 7 of the Clayton Act, 15 U.S.C. § 18.

The proposed Transaction constitutes the acquisition by Ridgeline Publishing Acquisition Corp. (ultimately controlled by PRCP IV through its general partner, Pinnacle Ridge Capital GP IV LLC) of 100% of the membership interests in MPH from AMH. MPH is organized as a Delaware limited liability company and, as such, is not a corporate entity within the meaning of the HSR Act. However, pursuant to 16 C.F.R. § 801.1(b)(2) and the FTC's interpretive guidance, the acquisition of membership interests in a limited liability company that confer control of the entity (defined as 50% or more of the profits or assets upon dissolution, or the contractual power to designate 50% or more of the directors or managers) is treated as an acquisition of non-corporate interests and is reportable under the HSR Act where the applicable thresholds are met. Because Ridgeline will acquire 100% of the membership interests in MPH, it will unambiguously acquire control of MPH, and the Transaction is therefore subject to HSR reporting requirements.

B. Size-of-Transaction Test

The HSR Act imposes reporting obligations only where the value of the voting securities, non-corporate interests, or assets to be acquired exceeds the applicable "size-of-transaction" threshold, which is adjusted annually by the FTC to reflect changes in gross national product. For calendar year 2024, the minimum size-of-transaction threshold is $111.4 million. The Transaction value of $480,000,000 substantially exceeds this threshold.

Under the HSR Act and the implementing rules, where the transaction value exceeds $478.9 million (the threshold above which the "size-of-person" test is inapplicable for 2024), no further analysis of the sizes of the parties is required. The Transaction value of $480,000,000 exceeds this upper threshold, and accordingly, the filing obligation exists irrespective of the sizes of the acquiring and acquired persons.

Notwithstanding the foregoing, we note for completeness that both the acquiring and acquired persons would independently satisfy the size-of-person test in any event. PRCP IV, the ultimate parent entity on the acquiring side, manages a fund with committed capital of approximately $6.2 billion, which would satisfy the "person" threshold of $22.3 million in total assets or annual net sales (as adjusted for 2024) by a wide margin. On the acquired side, Aurelius Global Media Group PLC ("Aurelius"), the ultimate parent entity of AMH and MPH, reported FY2023 consolidated revenues of approximately £3.8 billion (approximately $4.8 billion at current exchange rates), which likewise far exceeds the applicable threshold.

In sum, the Transaction is clearly reportable under the HSR Act, and both parties are obligated to file Notification and Report Forms prior to consummation.

C. Filing Parties

The HSR Act requires that both the "acquiring person" and the "acquired person" file separate Notification and Report Forms. Under the rules, the "person" filing the notification is the "ultimate parent entity" ("UPE") of the entity directly engaged in the transaction, together with all entities that the UPE controls. The filing parties for the Transaction are as follows:

Acquiring Person:

Pinnacle Ridge Capital Partners Fund IV, L.P. ("PRCP IV") is the ultimate parent entity of Ridgeline Publishing Acquisition Corp. PRCP IV is a Delaware limited partnership with its principal office at 600 Lexington Avenue, 38th Floor, New York, NY 10022. The general partner of PRCP IV is Pinnacle Ridge Capital GP IV LLC, a Delaware limited liability company. The fund manager is Pinnacle Ridge Capital Management LLC, also headquartered at 600 Lexington Avenue, 38th Floor, New York, NY 10022. PRCP IV will file the Notification and Report Form as the acquiring person UPE. All entities controlled by PRCP IV, including its existing portfolio companies, will need to be included in the organizational and revenue data submitted with the filing.

Acquired Person:

Aurelius Global Media Group PLC ("Aurelius") is the ultimate parent entity of AMH and MPH. Aurelius is a public limited company organized under the laws of England and Wales, with its registered office and principal headquarters at 14 Clarges Street, London W1J 8AQ, United Kingdom. Aurelius's American Depositary Receipts are listed on the Nasdaq Global Select Market, and its ordinary shares carry a premium listing on the London Stock Exchange. AMH, a Delaware corporation and the direct parent of MPH, is a wholly owned indirect subsidiary of Aurelius and will serve as the direct seller in the Transaction. Aurelius will file the Notification and Report Form as the acquired person UPE.

Both parties are required to file separate Notification and Report Forms, and the statutory waiting period does not commence until both filings have been received by the FTC and the DOJ.

III. Filing Fee

Under the HSR Act, as amended by the Merger Filing Fee Modernization Act of 2022 (effective February 27, 2023), the filing fee is determined based on the aggregate total value of the transaction and the applicable fee tier. For a transaction with a value of $480,000,000, the filing falls within the fee tier for transactions valued at more than $161.5 million but less than $500 million (as adjusted for fiscal year 2024), and the applicable filing fee is $280,150.

Only one filing fee is required per transaction, and it is the responsibility of the acquiring person to pay the fee. Per the anticipated terms of the MIPA (and consistent with standard practice in private equity-sponsored transactions of this nature), the HSR filing fee is to be borne by Buyer (Ridgeline / PRCP IV). Payment is to be made electronically to the FTC via pay.gov, the U.S. government's online payment portal, and must be completed prior to or contemporaneously with the submission of the Notification and Report Forms.

Calderwood & Harkness LLP will coordinate with Buyer's counsel, Hathaway, Locke & Barnett LLP (Graham Ashworth, Lead Partner; Danielle Ferreira, Senior Associate), at 51 West 52nd Street, New York, NY 10019, to confirm that Buyer's payment of the $280,150 filing fee has been processed in advance of or contemporaneously with the filing on May 20, 2024. We recommend confirming receipt of the payment by the FTC prior to submission of the notifications to avoid any administrative delay in the commencement of the waiting period.

IV. Planned Filing Timeline

A. Filing Date

The target filing date for both the acquiring person's and the acquired person's Notification and Report Forms is Monday, May 20, 2024. Both parties' notifications should be filed simultaneously or on the same calendar day to ensure that the statutory waiting period commences concurrently. A staggered filing — in which one party files in advance of the other — would result in the waiting period not beginning until the later filing is received, potentially introducing unnecessary delay.

Coordination with Buyer's counsel, Hathaway, Locke & Barnett LLP, is essential to ensure simultaneous filing. We recommend that both counsel teams confirm readiness and agree on a specific time for submission (e.g., before 12:00 p.m. Eastern Time on May 20, 2024) so that any last-minute issues can be resolved within the same business day. The FTC's electronic filing portal is available during regular business hours, and filings received after 5:00 p.m. Eastern Time are generally treated as having been received the following business day.

B. Waiting Period

The standard initial waiting period under the HSR Act is 30 calendar days from the date on which both filings are received by the FTC and the Antitrust Division of the DOJ. See 15 U.S.C. § 18a(b)(1)(B). If both filings are submitted and accepted on May 20, 2024, the initial waiting period would expire at 11:59 p.m. Eastern Time on June 19, 2024, assuming no intervening action by the agencies.

The waiting period may be shortened if early termination is granted (discussed in Section VII below), or it may be extended if either the FTC or the DOJ issues a Request for Additional Information and Documentary Material, commonly known as a "Second Request," pursuant to 15 U.S.C. § 18a(e)(1)(A). If a Second Request were issued (which is considered unlikely based on the conclusions of the Antitrust Risk Memo), the initial waiting period would be extended until 30 days after the date on which the acquiring person has substantially complied with the Second Request. Substantial compliance with a Second Request typically involves extensive document production, interrogatory responses, and potentially depositions of company executives, and can take several months to achieve. The implications of a potential Second Request for the Transaction timeline are discussed further in Section X.A below.

C. Key Transaction Timeline Context

The HSR filing should be understood within the broader context of the Transaction timeline. The key milestones and anticipated dates are as follows:

• May 3, 2024: LOI / Term Sheet executed by the parties; exclusivity period commences.

• May 3, 2024 – July 31, 2024: Exclusivity period, during which AMH has agreed not to solicit, negotiate, or entertain competing proposals for the sale of MPH.

• May 20, 2024 (target): Filing of HSR Notification and Report Forms by both parties.

• Approximately May 28, 2024: Draft MIPA expected to be circulated by Seller's counsel (Calderwood & Harkness LLP) to Buyer's counsel.

• On or about June 14, 2024: Carve-out audited financial statements for MPH and its subsidiaries expected to be delivered by Pemberton Graves LLP (engagement partner Robert Ainsley). These financial statements are being prepared in connection with the carve-out of MPH from Aurelius's consolidated financial reporting and will be a condition to Buyer's execution of the definitive agreement.

• June 19, 2024 (estimated): Expiration of HSR initial waiting period (absent early termination or Second Request).

• July 2024 (anticipated): Target signing of definitive MIPA, subject to completion of due diligence, negotiation of definitive documentation, and receipt of carve-out audited financial statements.

Filing the HSR notification in advance of signing the definitive agreement is permissible under the HSR Act and is common practice in transactions involving complex or time-sensitive deal processes. The HSR Act permits the filing of a notification based on a good faith intention to consummate the transaction, and the FTC has confirmed that the parties need not have a binding agreement in place at the time of filing. See 16 C.F.R. § 803.5(b); FTC Premerger Notification Office, Informal Interpretation No. 0505003. The LOI / Term Sheet executed on May 3, 2024 evidences the parties' good faith intention to consummate the Transaction and will serve as the primary transaction document attached to the filing (as discussed in Section V.A below).

By filing the HSR notification on May 20, 2024, the parties can allow the 30-day waiting period (or any shorter period resulting from early termination) to run concurrently with the ongoing negotiation of the definitive MIPA, the preparation of the carve-out audited financial statements, and the completion of Buyer's confirmatory due diligence. This approach minimizes the risk that HSR clearance will become a gating item on the critical path to closing and is consistent with the timeline preferences expressed by both parties during the LOI negotiations.

V. Required Documentary Attachments and Information

The Notification and Report Form requires the submission of various documents, organizational information, and financial data. The principal categories of required attachments are summarized below, together with a discussion of the specific considerations applicable to the Transaction.

A. Item 4(a) — Agreements

Item 4(a) of the Notification and Report Form requires the submission of all agreements relating to the transaction, including the definitive acquisition agreement, any side agreements, and any ancillary documents such as non-competition agreements, transition services agreements, and management agreements that relate to the proposed acquisition.

As of the planned filing date of May 20, 2024, the definitive MIPA has not yet been executed. Accordingly, the filing will attach the executed LOI / Term Sheet dated May 3, 2024 as the primary Item 4(a) document. The LOI sets forth the principal terms of the proposed Transaction, including the purchase price, the structure of the acquisition, the parties, and the material conditions to closing, and is therefore sufficient to satisfy the Item 4(a) requirement for purposes of the initial filing.

If the definitive MIPA or any other agreements relating to the Transaction are executed during the pendency of the waiting period, the filing parties may supplement the filing by providing copies of such agreements to the reviewing agency. However, we note that there is no formal obligation under the HSR Act or the implementing rules to supplement Item 4(a) documents after the filing has been submitted, absent the issuance of a Second Request or a specific request from the reviewing agency. Nevertheless, as a matter of best practice and in the interest of maintaining a cooperative posture with the agencies, we would recommend voluntarily supplementing the filing with the definitive MIPA if it is executed before the waiting period expires or early termination is granted.

B. Item 4(b) — Studies, Surveys, Analyses, and Reports

Item 4(b) of the Notification and Report Form requires the production of all studies, surveys, analyses, and reports that were prepared by or for any officer(s) or director(s) of the filing person (or, in the case of unincorporated entities, individuals exercising similar functions) for the purpose of evaluating or analyzing the transaction with respect to market shares, competition, competitors, markets, potential for sales growth, or expansion into product or geographic markets.

This is typically one of the most sensitive categories of documentary production in an HSR filing, as it may require the submission of internal documents that contain competitive assessments, market share analyses, or strategic rationale discussions that could be of interest to the reviewing agency. Careful collection and review of potentially responsive documents is essential.

We are coordinating with the following individuals and entities to identify and collect all documents potentially responsive to Item 4(b):

• Aurelius / AMH (Seller): Claudia Restrepo, General Counsel; Thomas Whitfield, SVP, Corporate Development. Ms. Restrepo and Mr. Whitfield have been asked to identify and collect all board materials, management presentations, memoranda, and other documents prepared for officers or directors of Aurelius, AMH, or MPH that evaluate or analyze the Transaction with reference to any of the Item 4(b) topics.

• Haverford Whitmore & Co. (Seller's Financial Advisor): Catherine Liang, Managing Director; Samuel Drummond, Vice President. Haverford Whitmore & Co. is located at 383 Madison Avenue, 11th Floor, New York, NY 10179. As the financial advisor retained by Aurelius in connection with the Transaction, Haverford Whitmore will have prepared various analyses, presentations, and reports for the Aurelius board of directors and management team. These materials are likely to include market analyses, comparable transaction analyses, valuation analyses, and strategic alternatives assessments, and are potentially responsive to Item 4(b) to the extent they discuss market shares, competition, competitors, or expansion into product or geographic markets.

We have specifically identified the following documents as potentially responsive and will review them for Item 4(b) purposes:

• The management presentation dated April 12, 2024, which was prepared by Aurelius management and delivered to Buyer in connection with Buyer's due diligence process. This presentation is understood to include an overview of MPH's market position, competitive landscape, and growth opportunities, and is likely to contain responsive content.

• Board materials prepared for the Aurelius board of directors in connection with the authorization of the sale process and the execution of the LOI, including any strategic review presentations and financial advisor presentations.

• Any Confidential Information Memorandum or "CIM" prepared by Haverford Whitmore & Co. in connection with the sale process, to the extent it contains competitive analyses or market share data.

• Any internal Aurelius or MPH strategic planning documents or annual operating plans that discuss market positioning, competitive dynamics, or expansion plans.

Calderwood & Harkness LLP will review all identified documents for responsiveness to Item 4(b) and for any applicable privilege claims before submission. Documents subject to the attorney-client privilege or the work product doctrine will be withheld, with appropriate privilege log entries prepared as necessary. The target date for completion of the Item 4(b) document collection and review is May 19, 2024 (Sunday), the day before the planned filing date.

C. Item 4(c) — Confidential Information Memorandum / Offering Materials

Item 4(c) of the Notification and Report Form requires the production of all documents and information filed with or received from any federal agency that are not otherwise publicly available, to the extent they relate to the transaction or the parties. This item is designed to capture regulatory filings and correspondence that may shed light on the competitive implications of the proposed transaction.

In the context of this Transaction, potentially responsive Item 4(c) documents may include:

• SEC filings by Aurelius in connection with its American Depositary Receipt program (Aurelius ADRs are listed on the Nasdaq Global Select Market), to the extent such filings reference the Transaction, the sale process, or the competitive landscape of MPH's business. We will review Aurelius's most recent Form 20-F and any Form 6-K filings for responsive content.

• Any filings or notifications made by Aurelius with the Financial Conduct Authority (FCA) in the United Kingdom or the London Stock Exchange in connection with the Transaction or the sale process, to the extent such filings contain non-public information.

• Any documents filed with or received from other federal agencies (e.g., the U.S. Copyright Office, the U.S. Department of Education, or any state regulatory agencies) that relate to MPH's operations, although we do not presently anticipate that any such filings exist.

We will collect and review all potentially responsive Item 4(c) documents prior to the filing date.

D. Organizational and Financial Information

The Notification and Report Form requires detailed organizational and financial information for both the acquiring person and the acquired person, including the following:

Revenue Data by NAICS Industry Code:

For the acquired person UPE (Aurelius) and its subsidiaries, the filing must include revenue data organized by North American Industry Classification System (NAICS) industry code. This data is used by the FTC and DOJ to identify potential competitive overlaps between the acquiring and acquired persons. Revenue data must be provided for the most recent fiscal year for all entities controlled by the UPE, including revenue attributable to MPH and its subsidiaries:

• Meridian Distribution Services Inc., a Delaware corporation (Delaware Division of Corporations file no. 4736201), which operates MPH's book and content distribution operations;

• Bellweather Academic Press Inc., a Delaware corporation (Delaware Division of Corporations file no. 4801133), which publishes academic and scholarly journals and textbooks;

• Foxglove Media LLC, a New York limited liability company, which operates MPH's digital content and media licensing business; and

• Meridian Press Canada ULC, an unlimited liability company organized under the laws of British Columbia, which manages MPH's Canadian publishing, distribution, and warehousing operations, including facilities in Toronto and Vancouver.

MPH's consolidated FY2023 revenue was approximately $1,140,000,000, and its FY2023 Adjusted EBITDA was approximately $96,000,000.

For the acquiring person UPE (PRCP IV) and its portfolio companies, the filing must include revenue data organized by NAICS industry code for all entities controlled by PRCP IV. We will coordinate with Buyer's counsel, Hathaway, Locke & Barnett LLP, to obtain the required revenue data for PRCP IV's portfolio companies.

Minority Shareholdings and Corporate Structure:

Both parties are required to disclose minority shareholdings in entities engaged in the same NAICS industry codes as the parties to the Transaction. This is designed to identify potential competitive overlaps arising from partial ownership interests. We will collect information on any minority shareholdings held by Aurelius (and its controlled subsidiaries) and PRCP IV (and its portfolio companies) in entities operating in the publishing, media, or related industries.

Additionally, complete corporate structure charts must be prepared for both the acquiring and acquired persons, showing the ownership chain from the UPE down to the entities directly involved in the Transaction.

Annual Reports and Financial Statements:

The filing must include the most recent annual report or Form 10-K (or equivalent) for each filing person's UPE. For Aurelius, this will be the most recent Form 20-F filed with the SEC, together with the annual report filed with the FCA. For PRCP IV, this will include the most recent audited financial statements of the fund, to the extent available, or alternative financial documentation as permitted by the FTC's rules for reporting by limited partnerships and investment funds.

E. Additional Exhibits

In addition to the documentary attachments and financial information described above, we will prepare and include the following exhibits with the filing:

• Pre-Closing Organizational Chart: A chart showing the current ownership chain from Aurelius Global Media Group PLC → Aurelius Media Holdings Inc. → Meridian Press Holdings LLC → subsidiaries (Meridian Distribution Services Inc., Bellweather Academic Press Inc., Foxglove Media LLC, and Meridian Press Canada ULC). This chart will illustrate the corporate structure of the acquired person and the position of MPH within the Aurelius group.

• Post-Closing Organizational Chart: A chart showing the anticipated post-closing ownership structure: Pinnacle Ridge Capital Partners Fund IV, L.P. → Pinnacle Ridge Capital GP IV LLC → Ridgeline Publishing Acquisition Corp. → Meridian Press Holdings LLC → subsidiaries. This chart will illustrate the structure of the acquiring person's ownership of MPH following the consummation of the Transaction.

These exhibits will be prepared in standard organizational chart format and will be included as attachments to the Notification and Report Forms for both the acquiring and acquired persons.

VI. Coordination with Buyer's Counsel

Effective coordination between Calderwood & Harkness LLP (as counsel to the Seller) and Hathaway, Locke & Barnett LLP (as counsel to the Buyer) is critical to ensuring a smooth and timely filing process. The principal areas of coordination are as follows:

1. Simultaneous Filing Date. Both counsel teams must confirm readiness to file the Notification and Report Forms on May 20, 2024, and agree on a specific submission time to ensure that both filings are received by the FTC and DOJ on the same calendar day. As noted above, a staggered filing would delay the commencement of the waiting period and introduce unnecessary risk to the Transaction timeline.

2. Payment of Filing Fee. Buyer's counsel must confirm that the $280,150 filing fee has been remitted to the FTC via pay.gov in advance of or contemporaneously with the filing. Calderwood & Harkness LLP will follow up with Hathaway, Locke & Barnett LLP to confirm receipt of payment.

3. Exchange of Organizational Information and Revenue Data. Each party's filing must include certain information about the other party, including revenue data by NAICS industry code, organizational structure information, and minority shareholdings. The counsel teams must exchange this information in a timely manner to allow each party to complete its Notification and Report Form. We anticipate exchanging this information on or before May 17, 2024, to allow sufficient time for review and incorporation into the filings.

4. Consistent Description of Transaction Structure. Both parties' filings must contain consistent descriptions of the transaction structure, the parties, and the consideration. The counsel teams should exchange and review the narrative descriptions of the Transaction that will be included in each party's filing to ensure consistency and avoid discrepancies that could prompt inquiries from the reviewing agency.

5. Joint Strategy for Requesting Early Termination. Both parties should coordinate on the strategy for requesting early termination of the waiting period, as discussed in Section VII below. Both counsel teams should confirm that each party's filing will include a request for early termination and that the substantive bases for the request are consistently described.

We recommend scheduling a coordination call with Graham Ashworth and Danielle Ferreira of Hathaway, Locke & Barnett LLP early in the week of May 20, 2024 (ideally on Monday morning, prior to the filing) to finalize logistics, confirm readiness, and resolve any outstanding issues. If any complications arise with respect to the document collection, revenue data, or fee payment, this call will provide an opportunity to address them before the filing is submitted.

VII. Early Termination Request Strategy

Under 15 U.S.C. § 18a(b)(2), the FTC and the DOJ may terminate the waiting period before the expiration of the initial 30-day period if they determine, upon review of the notifications and any other information, that neither agency intends to take further action with respect to the proposed transaction. This is known as "early termination" and, if granted, permits the parties to consummate the transaction immediately upon publication of the early termination notice on the FTC's website.

Both filing parties are entitled to request early termination of the waiting period on their respective Notification and Report Forms by checking the designated box on the form. We recommend that both parties request early termination. There is no disadvantage to requesting early termination, and it may result in a material acceleration of the Transaction timeline.

The substantive basis for the early termination request is strong. As set forth in the Antitrust Risk Memo dated April 22, 2024, the following factors support a finding by the agencies that the Transaction does not raise competitive concerns warranting further investigation:

• Competitive Industry. The publishing industry — including trade book publishing, periodical publishing, academic and scholarly publishing, and educational content — is a highly competitive sector with numerous participants of varying sizes, including major publishing groups, independent publishers, academic presses, and digital-native content platforms. MPH's market share in any relevant product or geographic market is modest, and the Transaction is not expected to result in any material increase in concentration in any relevant market.

• No Horizontal Overlap. The Transaction involves the acquisition of MPH, a publishing and content business, by PRCP IV, a private equity fund. PRCP IV's existing portfolio does not include any companies operating in the book publishing, periodical publishing, educational content, or related industries. Accordingly, there is no horizontal competitive overlap between the acquiring person and the target business, and the Transaction is purely a change of ownership that does not alter the competitive landscape.

• Carve-Out Divestiture by Diversified Conglomerate. The Transaction represents a carve-out divestiture by Aurelius, a diversified global media conglomerate, of its legacy publishing division. Aurelius has publicly stated its strategic intention to divest non-core assets and focus on its digital media, entertainment, and broadcasting platforms. The divestiture of MPH is part of this broader strategic rationalization and does not reflect an effort by either party to consolidate market power in the publishing industry.

• No Vertical Integration Concerns. No vertical integration concerns are anticipated. PRCP IV does not control any companies that are significant suppliers to or customers of MPH, and the Transaction is not expected to create or enhance any ability or incentive for foreclosure of competitors or suppliers.

• Low Substantive Antitrust Risk. As concluded in the Antitrust Risk Memo, the substantive antitrust risk associated with the Transaction is assessed as low. The Transaction does not raise concerns under the DOJ/FTC Merger Guidelines (2023 revision) with respect to unilateral effects, coordinated effects, or market concentration.

Based on historical data and our experience with similar transactions, early termination requests in transactions involving the private equity acquisition of publishing assets with no competitive overlap between the acquiring person and the target are typically granted within 15 to 25 days of the filing date. If the filing is submitted on May 20, 2024, early termination could reasonably be expected by approximately mid-to-late June 2024, potentially in advance of the expiration of the full 30-day waiting period on June 19, 2024.

It should be noted that early termination, if granted, is publicly posted on the FTC's website. The names of the acquiring and acquired persons, the transaction number, and the date of early termination are disclosed in the public notice. The parties should be prepared for the possibility that the early termination notice may become the first public disclosure of the Transaction. We recommend discussing this consideration with the client team to ensure that appropriate press and investor relations planning is in place.

VIII. Canadian Competition Act Filing

In addition to the HSR Act filing in the United States, a notification under the Canadian Competition Act, R.S.C. 1985, c. C-34, is required in connection with the Transaction. This obligation arises from the operations of Meridian Press Canada ULC, an unlimited liability company organized under the laws of British Columbia, which is a wholly owned subsidiary of MPH. Meridian Press Canada ULC operates MPH's Canadian publishing, distribution, and warehousing operations, including office and warehouse facilities located in Toronto, Ontario and Vancouver, British Columbia. The Canadian operations generate revenues in Canada that exceed the applicable notification thresholds under the Competition Act, and accordingly, a pre-merger notification must be filed with the Canadian Competition Bureau.

The Canadian filing will be prepared and submitted promptly following the submission of the HSR filing in the United States, with a target submission date in late May 2024. The notification will be filed in the form of a short-form filing, which is appropriate given the absence of competitive overlap and the modest market share of Meridian Press Canada ULC in the Canadian market.

The review period under the Canadian Competition Act for a short-form notification is typically 30 calendar days from the date of filing. The Competition Bureau may extend this review period by issuing a Supplementary Information Request ("SIR"), which is the Canadian equivalent of a Second Request under the HSR Act. However, based on the competitive analysis set forth in the Antitrust Risk Memo, the issuance of a SIR is considered unlikely, and we anticipate that the Canadian filing will be reviewed and cleared within the standard 30-day review period.

We will coordinate with Buyer's counsel, Hathaway, Locke & Barnett LLP, on the Canadian filing, including the exchange of information and organizational data required for both parties' notifications. The parties may elect to retain Canadian competition counsel to assist with the preparation and filing of the Canadian notification, and we will discuss this option with the client team and Buyer's counsel.

Target clearance date for the Canadian Competition Act filing: late July 2024. This timeline is consistent with the anticipated timeline for signing and closing of the Transaction and should not be a gating item on the critical path.

IX. CFIUS Considerations

As addressed in the Antitrust Risk Memo dated April 22, 2024, no filing with the Committee on Foreign Investment in the United States ("CFIUS") is required in connection with the Transaction.

CFIUS, which operates under the authority of the Foreign Investment Risk Review Modernization Act of 2018 ("FIRRMA"), 50 U.S.C. §§ 4565 et seq., and the implementing regulations at 31 C.F.R. Parts 800 and 802, reviews certain transactions involving the acquisition of U.S. businesses by or involving foreign persons to assess potential national security implications. Mandatory CFIUS filings are required for certain transactions involving "TID U.S. businesses" — that is, U.S. businesses that involve critical technology, critical infrastructure, or sensitive personal data.

MPH does not constitute a "TID U.S. business" within the meaning of the applicable regulations. Specifically:

• MPH does not produce, design, test, manufacture, fabricate, or develop any "critical technology" as defined in 31 C.F.R. § 800.215, including items controlled under the International Traffic in Arms Regulations (ITAR), the Export Administration Regulations (EAR), or the Nuclear Regulatory Commission's regulations.

• MPH does not own, operate, supply, or service any "critical infrastructure" as defined in 31 C.F.R. § 800.214 and Appendix A to Part 800.

• MPH does not maintain or collect, directly or indirectly, "sensitive personal data" of U.S. citizens within the meaning of 31 C.F.R. § 800.241, or if it does, only in the ordinary course of its consumer-facing publishing and subscription operations in a manner and volume that would not trigger mandatory CFIUS filing obligations.

Furthermore, although Aurelius is a UK-headquartered entity, the seller-side foreign ownership does not independently trigger a mandatory CFIUS filing. The relevant question under FIRRMA is whether a "foreign person" is acquiring control of, or making a "covered investment" in, a TID U.S. business. In this case, the Buyer (PRCP IV / Ridgeline) is a U.S.-based entity, and the Transaction involves the acquisition of MPH by a domestic acquirer from a foreign-owned seller. This structure does not give rise to a CFIUS-reviewable transaction.

Confirmed: No CFIUS filing or review is required in connection with the Transaction. No voluntary CFIUS filing is recommended at this time.

X. Risk Considerations and Contingencies

A. Second Request Risk

As discussed in Section IV.B above, if either the FTC or the DOJ issues a Second Request during the initial waiting period, the waiting period would be extended until 30 days after the acquiring person has substantially complied with the Second Request. Based on the competitive analysis set forth in the Antitrust Risk Memo, the risk of a Second Request is assessed as low. The Transaction involves the private equity acquisition of a publishing business with no horizontal competitive overlap, no vertical integration concerns, and no material increase in concentration in any relevant market. The publishing industry is competitive and fragmented, and the Transaction is a straightforward change-of-ownership divestiture by a diversified media conglomerate.

Nevertheless, it is prudent to address the contingency of a Second Request in the deal documentation and the Transaction timeline. A Second Request, if issued, would significantly extend the pre-closing timeline, potentially by several months, and would impose substantial document production and deposition obligations on the parties. The cost and burden of compliance with a Second Request can be material, particularly for the acquiring person, which bears the primary obligation to produce documents and provide information in response to the Request.

We recommend the following contractual protections in the MIPA to address antitrust risk:

• Antitrust Covenant. The MIPA should include a covenant requiring both parties to use reasonable best efforts (or, if the deal team and the client prefer a stronger formulation, a "hell or high water" commitment) to obtain all required antitrust clearances, including by cooperating with the reviewing agencies, promptly responding to requests for information, and taking all actions necessary to avoid or resolve any objections by the agencies to the consummation of the Transaction. The scope and intensity of this covenant will be a point of negotiation with Buyer's counsel, and we will address this issue in the SPA drafting memorandum.

• Outside Date / Drop-Dead Date. The MIPA should include an outside date or "drop-dead date" by which either party may terminate the agreement if the Transaction has not been consummated due to the failure to obtain required antitrust clearances. The outside date should be set sufficiently far in the future to accommodate the possibility of a Second Request and the time required for substantial compliance, although this scenario is considered remote. We would suggest an outside date of no earlier than twelve (12) months from the date of execution of the MIPA, with the possibility of a six-month extension if antitrust proceedings are pending at the time of the initial outside date.

• Reverse Termination Fee. Depending on the outcome of negotiations with Buyer's counsel, Seller may seek a reverse termination fee payable by Buyer in the event that the Transaction is terminated due to the failure to obtain antitrust clearance, as a means of compensating Seller for the opportunity cost and disruption associated with a failed transaction. This is a commercial point that will be addressed in the negotiation of the definitive MIPA.

B. State Antitrust Filings

We have reviewed the pre-merger notification requirements of all fifty states and the District of Columbia. No state-level antitrust or pre-merger notification filings are required in connection with this Transaction. While a small number of states historically maintained pre-merger notification statutes (e.g., the former New York and Virginia notification requirements), these have either been repealed or are inapplicable to the Transaction given its structure and the industries involved. No further analysis is required on this point.

C. Foreign Investment Filings (Other Jurisdictions)

Beyond the Canadian Competition Act notification discussed in Section VIII above, no other foreign antitrust, merger control, or foreign investment approval filings are anticipated in connection with the Transaction. MPH's operations are limited to the United States and Canada, and the Transaction does not involve the acquisition of assets or operations in any other jurisdiction that would trigger a filing obligation. We have specifically considered and ruled out filing obligations in the European Union (EU Merger Regulation), the United Kingdom (Enterprise Act 2002), Australia (Competition and Consumer Act 2010), and other jurisdictions with significant merger control regimes. None of these jurisdictions' thresholds are met based on the geographic scope of MPH's operations and revenues.

XI. Action Items and Next Steps

The following table summarizes the key action items, responsible parties, and target dates for the HSR filing process and related regulatory workstreams:

We will maintain a running status report on the filing process and will update the deal team and the client on any developments as they arise. All communications with the FTC, the DOJ, or the Canadian Competition Bureau will be documented and reported to the responsible partner.

XII. Conclusion

Based on the foregoing analysis, the HSR Act notification filing is on track for submission on May 20, 2024, under HSR Transaction No. 20241537. The filing is being made in advance of the execution of the definitive MIPA in order to allow the statutory waiting period to run concurrently with the ongoing negotiation and due diligence process, thereby minimizing the risk that antitrust clearance will become a gating item on the Transaction timeline.

The key conclusions and takeaways from this memorandum are as follows:

1. HSR Filing Obligation. The Transaction is clearly reportable under the HSR Act. The transaction value of $480,000,000 exceeds both the size-of-transaction threshold ($111.4 million) and the threshold above which the size-of-person test is inapplicable ($478.9 million) for 2024.

2. Substantive Antitrust Risk. Based on the analysis set forth in the Antitrust Risk Memo dated April 22, 2024, substantive antitrust risk is assessed as low. There is no horizontal competitive overlap between the acquiring person and the target business, and no vertical integration concerns are anticipated.

3. Early Termination. Both parties should request early termination of the waiting period. Early termination is expected to be granted, potentially by late June 2024, based on historical patterns for similar transactions.

4. Canadian Competition Act. A notification under the Canadian Competition Act is required given the operations of Meridian Press Canada ULC in Canada. The Canadian filing will be prepared and submitted promptly following the HSR filing, with clearance anticipated by late July 2024.

5. CFIUS. No CFIUS filing or review is required. MPH does not constitute a TID U.S. business, and the Transaction does not involve the acquisition of a U.S. business by a foreign person.

6. State Antitrust Filings. No state-level antitrust or pre-merger notification filings are required.

7. Other Foreign Filings. No other foreign antitrust, merger control, or foreign investment filings are required beyond the Canadian Competition Act notification.

Calderwood & Harkness LLP will continue to coordinate with Buyer's counsel, Hathaway, Locke & Barnett LLP, and with the Aurelius client team (Claudia Restrepo, Thomas Whitfield) as the filing process proceeds. We will provide updates on the status of the filing, the early termination request, and the Canadian Competition Act notification as developments warrant.

Please do not hesitate to contact me with any questions or if you would like to discuss any aspect of this memorandum in further detail.

Derek Okonkwo Associate, Mergers & Acquisitions Calderwood & Harkness LLP 425 Park Avenue New York, NY 10022 Tel: (212) 558-4217 dokonkwo@calderwoodharkness.com

This memorandum is a privileged and confidential attorney work product prepared in anticipation of litigation and for the purpose of providing legal advice. It is intended solely for the use of the addressee and the individuals identified on the distribution list. Any dissemination, distribution, or copying of this memorandum or the information contained herein to any person not authorized to receive it is strictly prohibited. If you have received this memorandum in error, please notify the sender immediately.

DATE:	May 17, 2024
TO:	Beatrice Holloway, Partner, Mergers & Acquisitions
FROM:	Derek Okonkwo, Associate, Mergers & Acquisitions
RE:	HSR Act Notification — Timing and Filing Considerations — Sale of Meridian Press Holdings LLC
CC:	Megan Chu (Lead Associate, M&A); James Prentice (Billing Partner, M&A)
Action Item	Responsible Party	Target Date
Finalize and compile Item 4(b) document collection from Aurelius (Claudia Restrepo, Thomas Whitfield) and Haverford Whitmore & Co. (Catherine Liang, Samuel Drummond); review all identified documents for privilege and responsiveness	Derek Okonkwo / Megan Chu; coordination with Claudia Restrepo and Catherine Liang	May 19, 2024
Coordination call with Buyer's counsel (Hathaway, Locke & Barnett LLP — Graham Ashworth / Danielle Ferreira) on filing logistics, simultaneous submission, fee payment, and early termination strategy	Derek Okonkwo; Graham Ashworth / Danielle Ferreira	Week of May 20, 2024 (ideally Monday morning)
Submit HSR Notification and Report Forms (both parties — simultaneous filing)	Calderwood & Harkness LLP (Seller side); Hathaway, Locke & Barnett LLP (Buyer side)	May 20, 2024
Buyer to remit $280,150 filing fee to FTC via pay.gov	Pinnacle Ridge Capital Partners Fund IV, L.P. / Hathaway, Locke & Barnett LLP	May 20, 2024 (on or before filing)
Prepare and file Canadian Competition Act notification (short-form)	Derek Okonkwo; coordination with Buyer's counsel and potential Canadian competition counsel	Promptly after May 20, 2024 (target late May 2024)
Monitor FTC/DOJ for early termination grant, Second Request, or other agency inquiry; track FTC website for public posting of early termination notice	Derek Okonkwo	Ongoing through June 2024
Report early termination status (or any agency inquiry) to deal team and client	Beatrice Holloway / Derek Okonkwo → Claudia Restrepo, Thomas Whitfield (Aurelius)	Upon receipt of early termination notice or agency communication

PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP 425 Park Avenue New York, NY 10022 Tel: (212) 558-4000
Fax: (212) 558-3588
Matter No. 1043-00002
MEMORANDUM
I. Executive Summary and Purpose
The purpose of this memorandum is to address the mechanics, timing, and logistical considerations for the required filing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, 15 U.S.C. § 18a (the "HSR Act"), and the rules promulgated thereunder by the Federal Trade Commission (the "FTC"), 16 C.F.R. Parts 801–803, in connection with the proposed sale of one hundred percent (100%) of the membership interests in Meridian Press Holdings LLC ("MPH"), a Delaware limited liability company (Delaware Division of Corporations file no. 4521889), by Aurelius Media Holdings Inc. ("AMH"), a Delaware corporation (Delaware Division of Corporations file no. 5987324), to Ridgeline Publishing Acquisition Corp. ("Ridgeline" or "Buyer"), a newly formed Delaware corporation to be organized as the acquisition vehicle for Pinnacle Ridge Capital Partners Fund IV, L.P. ("PRCP IV"), a Delaware limited partnership (Delaware Division of Corporations file no. 6234577) (the "Transaction").
The enterprise value of the Transaction is approximately $480,000,000, which clearly exceeds the applicable size-of-transaction threshold under the HSR Act for 2024. Accordingly, a pre-merger notification filing is required before the Transaction may be consummated. This memorandum analyzes the filing obligation, the applicable thresholds, the required documentary attachments and information, the anticipated filing timeline, the strategy for requesting early termination of the waiting period, and related regulatory considerations, including the required notification under the Canadian Competition Act and the inapplicability of the Committee on Foreign Investment in the United States ("CFIUS") review process.
The planned filing date for the HSR Notification and Report Forms is May 20, 2024 (Monday). The assigned HSR Transaction Number is 20241537. Both the acquiring person (PRCP IV) and the acquired person (Aurelius Global Media Group PLC, as described below) will file their respective notifications on or about that date to commence the statutory waiting period concurrently.
It should be noted that a Letter of Intent and Term Sheet (the "LOI") was executed by the parties on May 3, 2024, with an exclusivity period running through July 31, 2024. The definitive Membership Interest Purchase Agreement (the "MIPA") has not yet been circulated or executed. The filing is being prepared and submitted in advance of the anticipated definitive agreement in order to minimize timeline risk and to allow the waiting period to run during the period in which the definitive agreement is being negotiated. As discussed in Section IV.C below, the HSR Act permits the filing of a notification based on a good faith intention to consummate a transaction, and it is common practice to file prior to execution of the definitive agreement in circumstances such as these.
This memorandum should be read in conjunction with the Antitrust Risk Assessment Memorandum dated April 22, 2024 (the "Antitrust Risk Memo"), prepared by the undersigned and reviewed by Beatrice Holloway, which concluded that the substantive antitrust risk associated with the Transaction is low. The Antitrust Risk Memo analyzed the relevant product and geographic markets, competitive dynamics in the book publishing and educational content sectors, the absence of horizontal overlap between the acquiring person's portfolio and the target business, and the lack of vertical integration concerns. The conclusions of the Antitrust Risk Memo inform several of the strategic recommendations set forth herein, including the recommendation to request early termination of the waiting period.
II. Filing Obligation and Threshold Analysis
A. HSR Act Applicability
The HSR Act, 15 U.S.C. § 18a, requires that parties to certain acquisitions of voting securities, assets, or non-corporate interests file pre-merger notifications with the FTC and the Antitrust Division of the United States Department of Justice (the "DOJ") and observe a statutory waiting period before consummation of the proposed transaction. The purpose of the notification and waiting period is to provide the federal antitrust enforcement agencies with an opportunity to review proposed acquisitions and, where appropriate, to seek injunctive relief to prevent acquisitions that may substantially lessen competition or tend to create a monopoly in violation of Section 7 of the Clayton Act, 15 U.S.C. § 18.
The proposed Transaction constitutes the acquisition by Ridgeline Publishing Acquisition Corp. (ultimately controlled by PRCP IV through its general partner, Pinnacle Ridge Capital GP IV LLC) of 100% of the membership interests in MPH from AMH. MPH is organized as a Delaware limited liability company and, as such, is not a corporate entity within the meaning of the HSR Act. However, pursuant to 16 C.F.R. § 801.1(b)(2) and the FTC's interpretive guidance, the acquisition of membership interests in a limited liability company that confer control of the entity (defined as 50% or more of the profits or assets upon dissolution, or the contractual power to designate 50% or more of the directors or managers) is treated as an acquisition of non-corporate interests and is reportable under the HSR Act where the applicable thresholds are met. Because Ridgeline will acquire 100% of the membership interests in MPH, it will unambiguously acquire control of MPH, and the Transaction is therefore subject to HSR reporting requirements.
B. Size-of-Transaction Test
The HSR Act imposes reporting obligations only where the value of the voting securities, non-corporate interests, or assets to be acquired exceeds the applicable "size-of-transaction" threshold, which is adjusted annually by the FTC to reflect changes in gross national product. For calendar year 2024, the minimum size-of-transaction threshold is $111.4 million. The Transaction value of $480,000,000 substantially exceeds this threshold.
Under the HSR Act and the implementing rules, where the transaction value exceeds $478.9 million (the threshold above which the "size-of-person" test is inapplicable for 2024), no further analysis of the sizes of the parties is required. The Transaction value of $480,000,000 exceeds this upper threshold, and accordingly, the filing obligation exists irrespective of the sizes of the acquiring and acquired persons.
Notwithstanding the foregoing, we note for completeness that both the acquiring and acquired persons would independently satisfy the size-of-person test in any event. PRCP IV, the ultimate parent entity on the acquiring side, manages a fund with committed capital of approximately $6.2 billion, which would satisfy the "person" threshold of $22.3 million in total assets or annual net sales (as adjusted for 2024) by a wide margin. On the acquired side, Aurelius Global Media Group PLC ("Aurelius"), the ultimate parent entity of AMH and MPH, reported FY2023 consolidated revenues of approximately £3.8 billion (approximately $4.8 billion at current exchange rates), which likewise far exceeds the applicable threshold.
In sum, the Transaction is clearly reportable under the HSR Act, and both parties are obligated to file Notification and Report Forms prior to consummation.
C. Filing Parties
The HSR Act requires that both the "acquiring person" and the "acquired person" file separate Notification and Report Forms. Under the rules, the "person" filing the notification is the "ultimate parent entity" ("UPE") of the entity directly engaged in the transaction, together with all entities that the UPE controls. The filing parties for the Transaction are as follows:
Acquiring Person:
Pinnacle Ridge Capital Partners Fund IV, L.P. ("PRCP IV") is the ultimate parent entity of Ridgeline Publishing Acquisition Corp. PRCP IV is a Delaware limited partnership with its principal office at 600 Lexington Avenue, 38th Floor, New York, NY 10022. The general partner of PRCP IV is Pinnacle Ridge Capital GP IV LLC, a Delaware limited liability company. The fund manager is Pinnacle Ridge Capital Management LLC, also headquartered at 600 Lexington Avenue, 38th Floor, New York, NY 10022. PRCP IV will file the Notification and Report Form as the acquiring person UPE. All entities controlled by PRCP IV, including its existing portfolio companies, will need to be included in the organizational and revenue data submitted with the filing.
Acquired Person:
Aurelius Global Media Group PLC ("Aurelius") is the ultimate parent entity of AMH and MPH. Aurelius is a public limited company organized under the laws of England and Wales, with its registered office and principal headquarters at 14 Clarges Street, London W1J 8AQ, United Kingdom. Aurelius's American Depositary Receipts are listed on the Nasdaq Global Select Market, and its ordinary shares carry a premium listing on the London Stock Exchange. AMH, a Delaware corporation and the direct parent of MPH, is a wholly owned indirect subsidiary of Aurelius and will serve as the direct seller in the Transaction. Aurelius will file the Notification and Report Form as the acquired person UPE.
Both parties are required to file separate Notification and Report Forms, and the statutory waiting period does not commence until both filings have been received by the FTC and the DOJ.
III. Filing Fee
Under the HSR Act, as amended by the Merger Filing Fee Modernization Act of 2022 (effective February 27, 2023), the filing fee is determined based on the aggregate total value of the transaction and the applicable fee tier. For a transaction with a value of $480,000,000, the filing falls within the fee tier for transactions valued at more than $161.5 million but less than $500 million (as adjusted for fiscal year 2024), and the applicable filing fee is $280,150.
Only one filing fee is required per transaction, and it is the responsibility of the acquiring person to pay the fee. Per the anticipated terms of the MIPA (and consistent with standard practice in private equity-sponsored transactions of this nature), the HSR filing fee is to be borne by Buyer (Ridgeline / PRCP IV). Payment is to be made electronically to the FTC via pay.gov, the U.S. government's online payment portal, and must be completed prior to or contemporaneously with the submission of the Notification and Report Forms.
Calderwood & Harkness LLP will coordinate with Buyer's counsel, Hathaway, Locke & Barnett LLP (Graham Ashworth, Lead Partner; Danielle Ferreira, Senior Associate), at 51 West 52nd Street, New York, NY 10019, to confirm that Buyer's payment of the $280,150 filing fee has been processed in advance of or contemporaneously with the filing on May 20, 2024. We recommend confirming receipt of the payment by the FTC prior to submission of the notifications to avoid any administrative delay in the commencement of the waiting period.
IV. Planned Filing Timeline
A. Filing Date
The target filing date for both the acquiring person's and the acquired person's Notification and Report Forms is Monday, May 20, 2024. Both parties' notifications should be filed simultaneously or on the same calendar day to ensure that the statutory waiting period commences concurrently. A staggered filing — in which one party files in advance of the other — would result in the waiting period not beginning until the later filing is received, potentially introducing unnecessary delay.
Coordination with Buyer's counsel, Hathaway, Locke & Barnett LLP, is essential to ensure simultaneous filing. We recommend that both counsel teams confirm readiness and agree on a specific time for submission (e.g., before 12:00 p.m. Eastern Time on May 20, 2024) so that any last-minute issues can be resolved within the same business day. The FTC's electronic filing portal is available during regular business hours, and filings received after 5:00 p.m. Eastern Time are generally treated as having been received the following business day.
B. Waiting Period
The standard initial waiting period under the HSR Act is 30 calendar days from the date on which both filings are received by the FTC and the Antitrust Division of the DOJ. See 15 U.S.C. § 18a(b)(1)(B). If both filings are submitted and accepted on May 20, 2024, the initial waiting period would expire at 11:59 p.m. Eastern Time on June 19, 2024, assuming no intervening action by the agencies.
The waiting period may be shortened if early termination is granted (discussed in Section VII below), or it may be extended if either the FTC or the DOJ issues a Request for Additional Information and Documentary Material, commonly known as a "Second Request," pursuant to 15 U.S.C. § 18a(e)(1)(A). If a Second Request were issued (which is considered unlikely based on the conclusions of the Antitrust Risk Memo), the initial waiting period would be extended until 30 days after the date on which the acquiring person has substantially complied with the Second Request. Substantial compliance with a Second Request typically involves extensive document production, interrogatory responses, and potentially depositions of company executives, and can take several months to achieve. The implications of a potential Second Request for the Transaction timeline are discussed further in Section X.A below.
C. Key Transaction Timeline Context
The HSR filing should be understood within the broader context of the Transaction timeline. The key milestones and anticipated dates are as follows:
• May 3, 2024: LOI / Term Sheet executed by the parties; exclusivity period commences.
• May 3, 2024 – July 31, 2024: Exclusivity period, during which AMH has agreed not to solicit, negotiate, or entertain competing proposals for the sale of MPH.
• May 20, 2024 (target): Filing of HSR Notification and Report Forms by both parties.
• Approximately May 28, 2024: Draft MIPA expected to be circulated by Seller's counsel (Calderwood & Harkness LLP) to Buyer's counsel.
• On or about June 14, 2024: Carve-out audited financial statements for MPH and its subsidiaries expected to be delivered by Pemberton Graves LLP (engagement partner Robert Ainsley). These financial statements are being prepared in connection with the carve-out of MPH from Aurelius's consolidated financial reporting and will be a condition to Buyer's execution of the definitive agreement.
• June 19, 2024 (estimated): Expiration of HSR initial waiting period (absent early termination or Second Request).
• July 2024 (anticipated): Target signing of definitive MIPA, subject to completion of due diligence, negotiation of definitive documentation, and receipt of carve-out audited financial statements.
Filing the HSR notification in advance of signing the definitive agreement is permissible under the HSR Act and is common practice in transactions involving complex or time-sensitive deal processes. The HSR Act permits the filing of a notification based on a good faith intention to consummate the transaction, and the FTC has confirmed that the parties need not have a binding agreement in place at the time of filing. See 16 C.F.R. § 803.5(b); FTC Premerger Notification Office, Informal Interpretation No. 0505003. The LOI / Term Sheet executed on May 3, 2024 evidences the parties' good faith intention to consummate the Transaction and will serve as the primary transaction document attached to the filing (as discussed in Section V.A below).
By filing the HSR notification on May 20, 2024, the parties can allow the 30-day waiting period (or any shorter period resulting from early termination) to run concurrently with the ongoing negotiation of the definitive MIPA, the preparation of the carve-out audited financial statements, and the completion of Buyer's confirmatory due diligence. This approach minimizes the risk that HSR clearance will become a gating item on the critical path to closing and is consistent with the timeline preferences expressed by both parties during the LOI negotiations.
V. Required Documentary Attachments and Information
The Notification and Report Form requires the submission of various documents, organizational information, and financial data. The principal categories of required attachments are summarized below, together with a discussion of the specific considerations applicable to the Transaction.
A. Item 4(a) — Agreements
Item 4(a) of the Notification and Report Form requires the submission of all agreements relating to the transaction, including the definitive acquisition agreement, any side agreements, and any ancillary documents such as non-competition agreements, transition services agreements, and management agreements that relate to the proposed acquisition.
As of the planned filing date of May 20, 2024, the definitive MIPA has not yet been executed. Accordingly, the filing will attach the executed LOI / Term Sheet dated May 3, 2024 as the primary Item 4(a) document. The LOI sets forth the principal terms of the proposed Transaction, including the purchase price, the structure of the acquisition, the parties, and the material conditions to closing, and is therefore sufficient to satisfy the Item 4(a) requirement for purposes of the initial filing.
If the definitive MIPA or any other agreements relating to the Transaction are executed during the pendency of the waiting period, the filing parties may supplement the filing by providing copies of such agreements to the reviewing agency. However, we note that there is no formal obligation under the HSR Act or the implementing rules to supplement Item 4(a) documents after the filing has been submitted, absent the issuance of a Second Request or a specific request from the reviewing agency. Nevertheless, as a matter of best practice and in the interest of maintaining a cooperative posture with the agencies, we would recommend voluntarily supplementing the filing with the definitive MIPA if it is executed before the waiting period expires or early termination is granted.
B. Item 4(b) — Studies, Surveys, Analyses, and Reports
Item 4(b) of the Notification and Report Form requires the production of all studies, surveys, analyses, and reports that were prepared by or for any officer(s) or director(s) of the filing person (or, in the case of unincorporated entities, individuals exercising similar functions) for the purpose of evaluating or analyzing the transaction with respect to market shares, competition, competitors, markets, potential for sales growth, or expansion into product or geographic markets.
This is typically one of the most sensitive categories of documentary production in an HSR filing, as it may require the submission of internal documents that contain competitive assessments, market share analyses, or strategic rationale discussions that could be of interest to the reviewing agency. Careful collection and review of potentially responsive documents is essential.
We are coordinating with the following individuals and entities to identify and collect all documents potentially responsive to Item 4(b):
• Aurelius / AMH (Seller): Claudia Restrepo, General Counsel; Thomas Whitfield, SVP, Corporate Development. Ms. Restrepo and Mr. Whitfield have been asked to identify and collect all board materials, management presentations, memoranda, and other documents prepared for officers or directors of Aurelius, AMH, or MPH that evaluate or analyze the Transaction with reference to any of the Item 4(b) topics.
• Haverford Whitmore & Co. (Seller's Financial Advisor): Catherine Liang, Managing Director; Samuel Drummond, Vice President. Haverford Whitmore & Co. is located at 383 Madison Avenue, 11th Floor, New York, NY 10179. As the financial advisor retained by Aurelius in connection with the Transaction, Haverford Whitmore will have prepared various analyses, presentations, and reports for the Aurelius board of directors and management team. These materials are likely to include market analyses, comparable transaction analyses, valuation analyses, and strategic alternatives assessments, and are potentially responsive to Item 4(b) to the extent they discuss market shares, competition, competitors, or expansion into product or geographic markets.
We have specifically identified the following documents as potentially responsive and will review them for Item 4(b) purposes:
• The management presentation dated April 12, 2024, which was prepared by Aurelius management and delivered to Buyer in connection with Buyer's due diligence process. This presentation is understood to include an overview of MPH's market position, competitive landscape, and growth opportunities, and is likely to contain responsive content.
• Board materials prepared for the Aurelius board of directors in connection with the authorization of the sale process and the execution of the LOI, including any strategic review presentations and financial advisor presentations.
• Any Confidential Information Memorandum or "CIM" prepared by Haverford Whitmore & Co. in connection with the sale process, to the extent it contains competitive analyses or market share data.
• Any internal Aurelius or MPH strategic planning documents or annual operating plans that discuss market positioning, competitive dynamics, or expansion plans.
Calderwood & Harkness LLP will review all identified documents for responsiveness to Item 4(b) and for any applicable privilege claims before submission. Documents subject to the attorney-client privilege or the work product doctrine will be withheld, with appropriate privilege log entries prepared as necessary. The target date for completion of the Item 4(b) document collection and review is May 19, 2024 (Sunday), the day before the planned filing date.
C. Item 4(c) — Confidential Information Memorandum / Offering Materials
Item 4(c) of the Notification and Report Form requires the production of all documents and information filed with or received from any federal agency that are not otherwise publicly available, to the extent they relate to the transaction or the parties. This item is designed to capture regulatory filings and correspondence that may shed light on the competitive implications of the proposed transaction.
In the context of this Transaction, potentially responsive Item 4(c) documents may include:
• SEC filings by Aurelius in connection with its American Depositary Receipt program (Aurelius ADRs are listed on the Nasdaq Global Select Market), to the extent such filings reference the Transaction, the sale process, or the competitive landscape of MPH's business. We will review Aurelius's most recent Form 20-F and any Form 6-K filings for responsive content.
• Any filings or notifications made by Aurelius with the Financial Conduct Authority (FCA) in the United Kingdom or the London Stock Exchange in connection with the Transaction or the sale process, to the extent such filings contain non-public information.
• Any documents filed with or received from other federal agencies (e.g., the U.S. Copyright Office, the U.S. Department of Education, or any state regulatory agencies) that relate to MPH's operations, although we do not presently anticipate that any such filings exist.
We will collect and review all potentially responsive Item 4(c) documents prior to the filing date.
D. Organizational and Financial Information
The Notification and Report Form requires detailed organizational and financial information for both the acquiring person and the acquired person, including the following:
Revenue Data by NAICS Industry Code:
For the acquired person UPE (Aurelius) and its subsidiaries, the filing must include revenue data organized by North American Industry Classification System (NAICS) industry code. This data is used by the FTC and DOJ to identify potential competitive overlaps between the acquiring and acquired persons. Revenue data must be provided for the most recent fiscal year for all entities controlled by the UPE, including revenue attributable to MPH and its subsidiaries:
• Meridian Distribution Services Inc., a Delaware corporation (Delaware Division of Corporations file no. 4736201), which operates MPH's book and content distribution operations;
• Bellweather Academic Press Inc., a Delaware corporation (Delaware Division of Corporations file no. 4801133), which publishes academic and scholarly journals and textbooks;
• Foxglove Media LLC, a New York limited liability company, which operates MPH's digital content and media licensing business; and
• Meridian Press Canada ULC, an unlimited liability company organized under the laws of British Columbia, which manages MPH's Canadian publishing, distribution, and warehousing operations, including facilities in Toronto and Vancouver.
MPH's consolidated FY2023 revenue was approximately $1,140,000,000, and its FY2023 Adjusted EBITDA was approximately $96,000,000.
For the acquiring person UPE (PRCP IV) and its portfolio companies, the filing must include revenue data organized by NAICS industry code for all entities controlled by PRCP IV. We will coordinate with Buyer's counsel, Hathaway, Locke & Barnett LLP, to obtain the required revenue data for PRCP IV's portfolio companies.
Minority Shareholdings and Corporate Structure:
Both parties are required to disclose minority shareholdings in entities engaged in the same NAICS industry codes as the parties to the Transaction. This is designed to identify potential competitive overlaps arising from partial ownership interests. We will collect information on any minority shareholdings held by Aurelius (and its controlled subsidiaries) and PRCP IV (and its portfolio companies) in entities operating in the publishing, media, or related industries.
Additionally, complete corporate structure charts must be prepared for both the acquiring and acquired persons, showing the ownership chain from the UPE down to the entities directly involved in the Transaction.
Annual Reports and Financial Statements:
The filing must include the most recent annual report or Form 10-K (or equivalent) for each filing person's UPE. For Aurelius, this will be the most recent Form 20-F filed with the SEC, together with the annual report filed with the FCA. For PRCP IV, this will include the most recent audited financial statements of the fund, to the extent available, or alternative financial documentation as permitted by the FTC's rules for reporting by limited partnerships and investment funds.
E. Additional Exhibits
In addition to the documentary attachments and financial information described above, we will prepare and include the following exhibits with the filing:
• Pre-Closing Organizational Chart: A chart showing the current ownership chain from Aurelius Global Media Group PLC → Aurelius Media Holdings Inc. → Meridian Press Holdings LLC → subsidiaries (Meridian Distribution Services Inc., Bellweather Academic Press Inc., Foxglove Media LLC, and Meridian Press Canada ULC). This chart will illustrate the corporate structure of the acquired person and the position of MPH within the Aurelius group.
• Post-Closing Organizational Chart: A chart showing the anticipated post-closing ownership structure: Pinnacle Ridge Capital Partners Fund IV, L.P. → Pinnacle Ridge Capital GP IV LLC → Ridgeline Publishing Acquisition Corp. → Meridian Press Holdings LLC → subsidiaries. This chart will illustrate the structure of the acquiring person's ownership of MPH following the consummation of the Transaction.
These exhibits will be prepared in standard organizational chart format and will be included as attachments to the Notification and Report Forms for both the acquiring and acquired persons.
VI. Coordination with Buyer's Counsel
Effective coordination between Calderwood & Harkness LLP (as counsel to the Seller) and Hathaway, Locke & Barnett LLP (as counsel to the Buyer) is critical to ensuring a smooth and timely filing process. The principal areas of coordination are as follows:
1. Simultaneous Filing Date. Both counsel teams must confirm readiness to file the Notification and Report Forms on May 20, 2024, and agree on a specific submission time to ensure that both filings are received by the FTC and DOJ on the same calendar day. As noted above, a staggered filing would delay the commencement of the waiting period and introduce unnecessary risk to the Transaction timeline.
2. Payment of Filing Fee. Buyer's counsel must confirm that the $280,150 filing fee has been remitted to the FTC via pay.gov in advance of or contemporaneously with the filing. Calderwood & Harkness LLP will follow up with Hathaway, Locke & Barnett LLP to confirm receipt of payment.
3. Exchange of Organizational Information and Revenue Data. Each party's filing must include certain information about the other party, including revenue data by NAICS industry code, organizational structure information, and minority shareholdings. The counsel teams must exchange this information in a timely manner to allow each party to complete its Notification and Report Form. We anticipate exchanging this information on or before May 17, 2024, to allow sufficient time for review and incorporation into the filings.
4. Consistent Description of Transaction Structure. Both parties' filings must contain consistent descriptions of the transaction structure, the parties, and the consideration. The counsel teams should exchange and review the narrative descriptions of the Transaction that will be included in each party's filing to ensure consistency and avoid discrepancies that could prompt inquiries from the reviewing agency.
5. Joint Strategy for Requesting Early Termination. Both parties should coordinate on the strategy for requesting early termination of the waiting period, as discussed in Section VII below. Both counsel teams should confirm that each party's filing will include a request for early termination and that the substantive bases for the request are consistently described.
We recommend scheduling a coordination call with Graham Ashworth and Danielle Ferreira of Hathaway, Locke & Barnett LLP early in the week of May 20, 2024 (ideally on Monday morning, prior to the filing) to finalize logistics, confirm readiness, and resolve any outstanding issues. If any complications arise with respect to the document collection, revenue data, or fee payment, this call will provide an opportunity to address them before the filing is submitted.
VII. Early Termination Request Strategy
Under 15 U.S.C. § 18a(b)(2), the FTC and the DOJ may terminate the waiting period before the expiration of the initial 30-day period if they determine, upon review of the notifications and any other information, that neither agency intends to take further action with respect to the proposed transaction. This is known as "early termination" and, if granted, permits the parties to consummate the transaction immediately upon publication of the early termination notice on the FTC's website.
Both filing parties are entitled to request early termination of the waiting period on their respective Notification and Report Forms by checking the designated box on the form. We recommend that both parties request early termination. There is no disadvantage to requesting early termination, and it may result in a material acceleration of the Transaction timeline.
The substantive basis for the early termination request is strong. As set forth in the Antitrust Risk Memo dated April 22, 2024, the following factors support a finding by the agencies that the Transaction does not raise competitive concerns warranting further investigation:
• Competitive Industry. The publishing industry — including trade book publishing, periodical publishing, academic and scholarly publishing, and educational content — is a highly competitive sector with numerous participants of varying sizes, including major publishing groups, independent publishers, academic presses, and digital-native content platforms. MPH's market share in any relevant product or geographic market is modest, and the Transaction is not expected to result in any material increase in concentration in any relevant market.
• No Horizontal Overlap. The Transaction involves the acquisition of MPH, a publishing and content business, by PRCP IV, a private equity fund. PRCP IV's existing portfolio does not include any companies operating in the book publishing, periodical publishing, educational content, or related industries. Accordingly, there is no horizontal competitive overlap between the acquiring person and the target business, and the Transaction is purely a change of ownership that does not alter the competitive landscape.
• Carve-Out Divestiture by Diversified Conglomerate. The Transaction represents a carve-out divestiture by Aurelius, a diversified global media conglomerate, of its legacy publishing division. Aurelius has publicly stated its strategic intention to divest non-core assets and focus on its digital media, entertainment, and broadcasting platforms. The divestiture of MPH is part of this broader strategic rationalization and does not reflect an effort by either party to consolidate market power in the publishing industry.
• No Vertical Integration Concerns. No vertical integration concerns are anticipated. PRCP IV does not control any companies that are significant suppliers to or customers of MPH, and the Transaction is not expected to create or enhance any ability or incentive for foreclosure of competitors or suppliers.
• Low Substantive Antitrust Risk. As concluded in the Antitrust Risk Memo, the substantive antitrust risk associated with the Transaction is assessed as low. The Transaction does not raise concerns under the DOJ/FTC Merger Guidelines (2023 revision) with respect to unilateral effects, coordinated effects, or market concentration.
Based on historical data and our experience with similar transactions, early termination requests in transactions involving the private equity acquisition of publishing assets with no competitive overlap between the acquiring person and the target are typically granted within 15 to 25 days of the filing date. If the filing is submitted on May 20, 2024, early termination could reasonably be expected by approximately mid-to-late June 2024, potentially in advance of the expiration of the full 30-day waiting period on June 19, 2024.
It should be noted that early termination, if granted, is publicly posted on the FTC's website. The names of the acquiring and acquired persons, the transaction number, and the date of early termination are disclosed in the public notice. The parties should be prepared for the possibility that the early termination notice may become the first public disclosure of the Transaction. We recommend discussing this consideration with the client team to ensure that appropriate press and investor relations planning is in place.
VIII. Canadian Competition Act Filing
In addition to the HSR Act filing in the United States, a notification under the Canadian Competition Act, R.S.C. 1985, c. C-34, is required in connection with the Transaction. This obligation arises from the operations of Meridian Press Canada ULC, an unlimited liability company organized under the laws of British Columbia, which is a wholly owned subsidiary of MPH. Meridian Press Canada ULC operates MPH's Canadian publishing, distribution, and warehousing operations, including office and warehouse facilities located in Toronto, Ontario and Vancouver, British Columbia. The Canadian operations generate revenues in Canada that exceed the applicable notification thresholds under the Competition Act, and accordingly, a pre-merger notification must be filed with the Canadian Competition Bureau.
The Canadian filing will be prepared and submitted promptly following the submission of the HSR filing in the United States, with a target submission date in late May 2024. The notification will be filed in the form of a short-form filing, which is appropriate given the absence of competitive overlap and the modest market share of Meridian Press Canada ULC in the Canadian market.
The review period under the Canadian Competition Act for a short-form notification is typically 30 calendar days from the date of filing. The Competition Bureau may extend this review period by issuing a Supplementary Information Request ("SIR"), which is the Canadian equivalent of a Second Request under the HSR Act. However, based on the competitive analysis set forth in the Antitrust Risk Memo, the issuance of a SIR is considered unlikely, and we anticipate that the Canadian filing will be reviewed and cleared within the standard 30-day review period.
We will coordinate with Buyer's counsel, Hathaway, Locke & Barnett LLP, on the Canadian filing, including the exchange of information and organizational data required for both parties' notifications. The parties may elect to retain Canadian competition counsel to assist with the preparation and filing of the Canadian notification, and we will discuss this option with the client team and Buyer's counsel.
Target clearance date for the Canadian Competition Act filing: late July 2024. This timeline is consistent with the anticipated timeline for signing and closing of the Transaction and should not be a gating item on the critical path.
IX. CFIUS Considerations
As addressed in the Antitrust Risk Memo dated April 22, 2024, no filing with the Committee on Foreign Investment in the United States ("CFIUS") is required in connection with the Transaction.
CFIUS, which operates under the authority of the Foreign Investment Risk Review Modernization Act of 2018 ("FIRRMA"), 50 U.S.C. §§ 4565 et seq., and the implementing regulations at 31 C.F.R. Parts 800 and 802, reviews certain transactions involving the acquisition of U.S. businesses by or involving foreign persons to assess potential national security implications. Mandatory CFIUS filings are required for certain transactions involving "TID U.S. businesses" — that is, U.S. businesses that involve critical technology, critical infrastructure, or sensitive personal data.
MPH does not constitute a "TID U.S. business" within the meaning of the applicable regulations. Specifically:
• MPH does not produce, design, test, manufacture, fabricate, or develop any "critical technology" as defined in 31 C.F.R. § 800.215, including items controlled under the International Traffic in Arms Regulations (ITAR), the Export Administration Regulations (EAR), or the Nuclear Regulatory Commission's regulations.
• MPH does not own, operate, supply, or service any "critical infrastructure" as defined in 31 C.F.R. § 800.214 and Appendix A to Part 800.
• MPH does not maintain or collect, directly or indirectly, "sensitive personal data" of U.S. citizens within the meaning of 31 C.F.R. § 800.241, or if it does, only in the ordinary course of its consumer-facing publishing and subscription operations in a manner and volume that would not trigger mandatory CFIUS filing obligations.
Furthermore, although Aurelius is a UK-headquartered entity, the seller-side foreign ownership does not independently trigger a mandatory CFIUS filing. The relevant question under FIRRMA is whether a "foreign person" is acquiring control of, or making a "covered investment" in, a TID U.S. business. In this case, the Buyer (PRCP IV / Ridgeline) is a U.S.-based entity, and the Transaction involves the acquisition of MPH by a domestic acquirer from a foreign-owned seller. This structure does not give rise to a CFIUS-reviewable transaction.
Confirmed: No CFIUS filing or review is required in connection with the Transaction. No voluntary CFIUS filing is recommended at this time.
X. Risk Considerations and Contingencies
A. Second Request Risk
As discussed in Section IV.B above, if either the FTC or the DOJ issues a Second Request during the initial waiting period, the waiting period would be extended until 30 days after the acquiring person has substantially complied with the Second Request. Based on the competitive analysis set forth in the Antitrust Risk Memo, the risk of a Second Request is assessed as low. The Transaction involves the private equity acquisition of a publishing business with no horizontal competitive overlap, no vertical integration concerns, and no material increase in concentration in any relevant market. The publishing industry is competitive and fragmented, and the Transaction is a straightforward change-of-ownership divestiture by a diversified media conglomerate.
Nevertheless, it is prudent to address the contingency of a Second Request in the deal documentation and the Transaction timeline. A Second Request, if issued, would significantly extend the pre-closing timeline, potentially by several months, and would impose substantial document production and deposition obligations on the parties. The cost and burden of compliance with a Second Request can be material, particularly for the acquiring person, which bears the primary obligation to produce documents and provide information in response to the Request.
We recommend the following contractual protections in the MIPA to address antitrust risk:
• Antitrust Covenant. The MIPA should include a covenant requiring both parties to use reasonable best efforts (or, if the deal team and the client prefer a stronger formulation, a "hell or high water" commitment) to obtain all required antitrust clearances, including by cooperating with the reviewing agencies, promptly responding to requests for information, and taking all actions necessary to avoid or resolve any objections by the agencies to the consummation of the Transaction. The scope and intensity of this covenant will be a point of negotiation with Buyer's counsel, and we will address this issue in the SPA drafting memorandum.
• Outside Date / Drop-Dead Date. The MIPA should include an outside date or "drop-dead date" by which either party may terminate the agreement if the Transaction has not been consummated due to the failure to obtain required antitrust clearances. The outside date should be set sufficiently far in the future to accommodate the possibility of a Second Request and the time required for substantial compliance, although this scenario is considered remote. We would suggest an outside date of no earlier than twelve (12) months from the date of execution of the MIPA, with the possibility of a six-month extension if antitrust proceedings are pending at the time of the initial outside date.
• Reverse Termination Fee. Depending on the outcome of negotiations with Buyer's counsel, Seller may seek a reverse termination fee payable by Buyer in the event that the Transaction is terminated due to the failure to obtain antitrust clearance, as a means of compensating Seller for the opportunity cost and disruption associated with a failed transaction. This is a commercial point that will be addressed in the negotiation of the definitive MIPA.
B. State Antitrust Filings
We have reviewed the pre-merger notification requirements of all fifty states and the District of Columbia. No state-level antitrust or pre-merger notification filings are required in connection with this Transaction. While a small number of states historically maintained pre-merger notification statutes (e.g., the former New York and Virginia notification requirements), these have either been repealed or are inapplicable to the Transaction given its structure and the industries involved. No further analysis is required on this point.
C. Foreign Investment Filings (Other Jurisdictions)
Beyond the Canadian Competition Act notification discussed in Section VIII above, no other foreign antitrust, merger control, or foreign investment approval filings are anticipated in connection with the Transaction. MPH's operations are limited to the United States and Canada, and the Transaction does not involve the acquisition of assets or operations in any other jurisdiction that would trigger a filing obligation. We have specifically considered and ruled out filing obligations in the European Union (EU Merger Regulation), the United Kingdom (Enterprise Act 2002), Australia (Competition and Consumer Act 2010), and other jurisdictions with significant merger control regimes. None of these jurisdictions' thresholds are met based on the geographic scope of MPH's operations and revenues.
XI. Action Items and Next Steps
The following table summarizes the key action items, responsible parties, and target dates for the HSR filing process and related regulatory workstreams:
We will maintain a running status report on the filing process and will update the deal team and the client on any developments as they arise. All communications with the FTC, the DOJ, or the Canadian Competition Bureau will be documented and reported to the responsible partner.
XII. Conclusion
Based on the foregoing analysis, the HSR Act notification filing is on track for submission on May 20, 2024, under HSR Transaction No. 20241537. The filing is being made in advance of the execution of the definitive MIPA in order to allow the statutory waiting period to run concurrently with the ongoing negotiation and due diligence process, thereby minimizing the risk that antitrust clearance will become a gating item on the Transaction timeline.
The key conclusions and takeaways from this memorandum are as follows:
1. HSR Filing Obligation. The Transaction is clearly reportable under the HSR Act. The transaction value of $480,000,000 exceeds both the size-of-transaction threshold ($111.4 million) and the threshold above which the size-of-person test is inapplicable ($478.9 million) for 2024.
2. Substantive Antitrust Risk. Based on the analysis set forth in the Antitrust Risk Memo dated April 22, 2024, substantive antitrust risk is assessed as low. There is no horizontal competitive overlap between the acquiring person and the target business, and no vertical integration concerns are anticipated.
3. Early Termination. Both parties should request early termination of the waiting period. Early termination is expected to be granted, potentially by late June 2024, based on historical patterns for similar transactions.
4. Canadian Competition Act. A notification under the Canadian Competition Act is required given the operations of Meridian Press Canada ULC in Canada. The Canadian filing will be prepared and submitted promptly following the HSR filing, with clearance anticipated by late July 2024.
5. CFIUS. No CFIUS filing or review is required. MPH does not constitute a TID U.S. business, and the Transaction does not involve the acquisition of a U.S. business by a foreign person.
6. State Antitrust Filings. No state-level antitrust or pre-merger notification filings are required.
7. Other Foreign Filings. No other foreign antitrust, merger control, or foreign investment filings are required beyond the Canadian Competition Act notification.
Calderwood & Harkness LLP will continue to coordinate with Buyer's counsel, Hathaway, Locke & Barnett LLP, and with the Aurelius client team (Claudia Restrepo, Thomas Whitfield) as the filing process proceeds. We will provide updates on the status of the filing, the early termination request, and the Canadian Competition Act notification as developments warrant.
Please do not hesitate to contact me with any questions or if you would like to discuss any aspect of this memorandum in further detail.
Derek Okonkwo Associate, Mergers & Acquisitions Calderwood & Harkness LLP 425 Park Avenue New York, NY 10022 Tel: (212) 558-4217 dokonkwo@calderwoodharkness.com
This memorandum is a privileged and confidential attorney work product prepared in anticipation of litigation and for the purpose of providing legal advice. It is intended solely for the use of the addressee and the individuals identified on the distribution list. Any dissemination, distribution, or copying of this memorandum or the information contained herein to any person not authorized to receive it is strictly prohibited. If you have received this memorandum in error, please notify the sender immediately.
DATE: | May 17, 2024
TO: | Beatrice Holloway, Partner, Mergers & Acquisitions
FROM: | Derek Okonkwo, Associate, Mergers & Acquisitions
RE: | HSR Act Notification — Timing and Filing Considerations — Sale of Meridian Press Holdings LLC
CC: | Megan Chu (Lead Associate, M&A); James Prentice (Billing Partner, M&A)
Action Item | Responsible Party | Target Date
Finalize and compile Item 4(b) document collection from Aurelius (Claudia Restrepo, Thomas Whitfield) and Haverford Whitmore & Co. (Catherine Liang, Samuel Drummond); review all identified documents for privilege and responsiveness | Derek Okonkwo / Megan Chu; coordination with Claudia Restrepo and Catherine Liang | May 19, 2024
Coordination call with Buyer's counsel (Hathaway, Locke & Barnett LLP — Graham Ashworth / Danielle Ferreira) on filing logistics, simultaneous submission, fee payment, and early termination strategy | Derek Okonkwo; Graham Ashworth / Danielle Ferreira | Week of May 20, 2024 (ideally Monday morning)
Submit HSR Notification and Report Forms (both parties — simultaneous filing) | Calderwood & Harkness LLP (Seller side); Hathaway, Locke & Barnett LLP (Buyer side) | May 20, 2024
Buyer to remit $280,150 filing fee to FTC via pay.gov | Pinnacle Ridge Capital Partners Fund IV, L.P. / Hathaway, Locke & Barnett LLP | May 20, 2024 (on or before filing)
Prepare and file Canadian Competition Act notification (short-form) | Derek Okonkwo; coordination with Buyer's counsel and potential Canadian competition counsel | Promptly after May 20, 2024 (target late May 2024)
Monitor FTC/DOJ for early termination grant, Second Request, or other agency inquiry; track FTC website for public posting of early termination notice | Derek Okonkwo | Ongoing through June 2024
Report early termination status (or any agency inquiry) to deal team and client | Beatrice Holloway / Derek Okonkwo → Claudia Restrepo, Thomas Whitfield (Aurelius) | Upon receipt of early termination notice or agency communication

PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT

MEMORANDUM

Record

Parties

Dates

Amounts