1041-00001 · Thorngate Capital Partners · Closing

post-clearance-status-memo.docx DOCUMENT Antitrust

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PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION

This memorandum and all attachments hereto constitute a privileged and confidential attorney-client communication prepared by Calderwood & Harkness LLP for the exclusive use of the addressees identified below. This document contains legal advice, attorney work product, and confidential business information. Any unauthorized review, use, disclosure, copying, or distribution of this memorandum or any information contained herein is strictly prohibited. If you have received this memorandum in error, please contact Calderwood & Harkness LLP immediately at (202) 555-7400.

MEMORANDUM

FROM: Howard Bellamy, Partner, and Monica Reyes, Senior Associate Calderwood & Harkness LLP 1900 K Street NW, Suite 800 Washington, DC 20006

TO: Graham A. Whitfield, Founding Partner & CEO, and Sandra K. Levinson, Co-Managing Partner & CIO Solara Digital Infrastructure GP LLC 200 Tatnall Street, Suite 1400 Wilmington, DE 19801

DATE: January 22, 2024

RE: Post-Clearance Status Report — FTC Second Request Compliance, FTC File No. 231-0487; Proposed Acquisition of Pinnacle Cloud Systems, Inc. by Solara Digital Infrastructure Fund IV LP

MATTER NO.: 1041-00001

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I. EXECUTIVE SUMMARY

The purpose of this memorandum is to provide a comprehensive summary of the outcome of the Federal Trade Commission ("FTC") Second Request investigation and the resulting clearance of the proposed acquisition of Pinnacle Cloud Systems, Inc. ("Pinnacle" or the "Target") by Solara Digital Infrastructure Fund IV LP ("Fund IV"), through its wholly owned indirect acquisition subsidiary PCS Acquisition Corp. ("Merger Sub"). This memorandum is intended to serve as the definitive record of the antitrust clearance process, to confirm the satisfaction of the antitrust condition precedent under the governing transaction documents, and to outline the remaining steps necessary to bring the transaction to a successful closing.

Key Result. On January 19, 2024, the FTC allowed the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, 15 U.S.C. § 18a (the "HSR Act"), to expire without taking any enforcement action, thereby clearing the transaction for consummation. The FTC's decision not to challenge the acquisition represents an unconditional clearance — no consent decree, remedial order, divestiture requirement, behavioral commitment, or any other condition was imposed upon the parties.

The FTC's Second Request was issued on May 29, 2023, and clearance was obtained 235 calendar days later. The investigation was conducted by the Bureau of Competition, Mergers IV Division, and involved an extensive review of the competitive landscape in cloud-based portfolio analytics, performance attribution software, and related order management and execution management systems for institutional investors. Following substantial compliance certifications by both Solara and Pinnacle, the filing of a comprehensive Economic Submission, two rounds of privilege challenges (all of which were fully sustained in Solara's favor), an advocacy presentation to FTC Staff, and a Senior Staff briefing, the Commission ultimately determined not to seek to block the proposed transaction.

Satisfaction of Closing Condition. The antitrust condition precedent contained in Section 7.1(b) of the Stock Purchase Agreement dated April 14, 2023 (the "Merger Agreement"), which required the expiration or termination of all applicable waiting periods under the HSR Act without the imposition of any injunction, order, or other governmental action prohibiting consummation of the transaction, is now fully satisfied. The transaction may proceed to closing within the timeframe contemplated by the Merger Agreement, well in advance of the Outside Date of April 14, 2024.

Engagement Cost Summary. Total Solara-side Second Request compliance costs were approximately $7.56 million, consisting of approximately $5.74 million in Calderwood & Harkness LLP legal fees and approximately $1.82 million in document review, processing, and hosting costs charged by Keymark Document Solutions LLC. A final invoice and matter closing letter will follow separately under cover of the engagement letter dated May 30, 2023.

We are pleased with this outcome and believe it reflects both the strength of the merits of this transaction and the effectiveness of the advocacy strategy pursued throughout the investigation. The sections that follow provide a detailed account of the transaction background, the chronology of the Second Request process, production and compliance statistics, the substance of the FTC's investigation and our advocacy efforts, the satisfaction of the Merger Agreement's antitrust condition, a summary of engagement costs, and recommended next steps for closing.

II. BACKGROUND AND TRANSACTION OVERVIEW

A. Transaction Structure

The proposed transaction involves the acquisition of 100% of the outstanding capital stock of Pinnacle Cloud Systems, Inc., a Delaware corporation, by Solara Digital Infrastructure Fund IV LP, a Delaware limited partnership, acting through PCS Acquisition Corp., a newly formed Delaware corporation and wholly owned indirect subsidiary of Fund IV. The transaction is structured as a stock purchase, with Merger Sub acquiring all outstanding shares of Pinnacle's common stock from the Sellers identified in the Merger Agreement.

The aggregate enterprise value of the transaction is approximately $1.63 billion, consisting of approximately $1.19 billion in cash consideration and approximately $440 million in rollover equity contributions from Pinnacle management and certain existing investors. The rollover equity component represents approximately 27% of the total enterprise value, reflecting a meaningful continuing investment by Pinnacle's management team and key stakeholders in the combined business on a go-forward basis.

On an implied multiples basis, the $1.63 billion enterprise value represents approximately 4.21x Pinnacle's last-twelve-months ("LTM") revenue of approximately $387 million and approximately 21.85x Pinnacle's LTM EBITDA of approximately $74.6 million. These multiples are broadly consistent with prevailing valuation benchmarks for high-growth, recurring-revenue SaaS companies in the financial technology sector, and reflect the strategic premium associated with Pinnacle's differentiated market position and the anticipated synergies from the combination with Meridian Workflow Solutions, Inc.

B. Strategic Rationale

The strategic rationale for the acquisition is to combine Pinnacle's cloud-based portfolio analytics, risk modeling, ESG scoring, and performance attribution platform with Solara's existing portfolio company, Meridian Workflow Solutions, Inc. ("Meridian"), a SaaS-based trade execution and order management platform serving institutional asset managers, asset owners, and multi-strategy hedge funds. The combination is intended to create an integrated front-to-back-office technology stack for institutional investors, enabling seamless workflow from trade ideation and analytics through execution, settlement, and performance reporting within a single, unified platform.

Pinnacle's core strengths lie in its proprietary analytics engine, which provides real-time portfolio construction and optimization, multi-factor risk decomposition, forward-looking stress testing, and ESG integration scoring capabilities. Meridian's strengths, by contrast, are concentrated in trade execution, order management, compliance workflows, and post-trade processing. The integration of these complementary capabilities is expected to generate significant revenue synergies through cross-selling opportunities, enhanced customer retention, and accelerated product development, as well as cost synergies from the consolidation of overlapping infrastructure and administrative functions.

C. Transaction Documentation

The Merger Agreement was executed on April 14, 2023, by and among Solara Digital Infrastructure Fund IV LP, PCS Acquisition Corp., Pinnacle Cloud Systems, Inc., Thorngate Capital Partners LP (acting in its capacity as the Sellers' Representative), and the Sellers named therein. The Merger Agreement contains customary representations and warranties, pre-closing covenants, closing conditions (including the antitrust condition discussed in Section VI below), indemnification provisions, and termination rights.

D. HSR Act Filing and Second Request

The parties submitted their respective HSR Act premerger notification filings to the FTC and the Antitrust Division of the U.S. Department of Justice ("DOJ") on April 28, 2023. The required filing fee of $450,000 was paid at the time of filing, calculated on the basis of the aggregate transaction value. The initial 30-day statutory waiting period was set to expire on May 28, 2023; however, by mutual agreement with FTC Staff, the expiration was extended by one day to May 29, 2023, to accommodate a staff scheduling matter.

On May 29, 2023, the FTC Bureau of Competition, Mergers IV Division, issued a Second Request for Additional Information and Documentary Material (the "Second Request"), bearing FTC File No. 231-0487. The Second Request contained 47 individual specifications covering a broad range of documents, data, and information relating to the parties' respective businesses, competitive dynamics, market structure, pricing, customers, and the strategic rationale for the transaction. The issuance of the Second Request triggered a new waiting period that would not expire until 30 days after both parties had substantially complied with all of the Second Request's specifications.

On May 30, 2023, Calderwood & Harkness LLP was formally engaged by Solara Digital Infrastructure GP LLC to handle all aspects of Second Request compliance, privilege review, economic analysis and submissions, and advocacy before the FTC in connection with the investigation. Monica Reyes, Senior Associate, served as the day-to-day lead on the engagement, under the overall direction and supervision of Howard Bellamy, Partner.

III. CHRONOLOGY OF KEY EVENTS AND MILESTONES

The following is a detailed chronological summary of the principal events and milestones in the Second Request investigation, from the execution of the Merger Agreement through FTC clearance.

A. Pre-Second Request Phase

The issuance of a Second Request, while not unusual for transactions of this size and involving overlapping technology platforms in concentrated market segments, required the immediate mobilization of substantial legal, economic, and document management resources. Calderwood & Harkness assembled a cross-functional team comprising antitrust attorneys, e-discovery specialists, and economic consultants to manage the compliance process on an accelerated timetable.

B. Document Collection and Review Phase

The document review phase was the most resource-intensive portion of the Second Request compliance process. Calderwood & Harkness, in coordination with Keymark, implemented a multi-tier review workflow consisting of first-level responsiveness and privilege review, second-level quality control review, and senior attorney privilege review for all documents flagged as potentially privileged. The review team operated on an accelerated schedule, with the objective of achieving Substantial Compliance Certification within approximately four months of the Second Request's issuance — a timeline that, while aggressive, was achievable given the focused nature of the custodial population and the disciplined application of the agreed-upon search term and date-range protocols negotiated with FTC Staff.

Throughout the collection and review phase, Calderwood & Harkness maintained regular communication with FTC Staff regarding the scope and pace of compliance, and negotiated modifications to certain specifications where appropriate to reduce the burden of production without compromising the completeness of the evidentiary record. These negotiations included agreements on custodian prioritization, date ranges for certain document categories, and the format and structure of the structured data submissions.

C. Substantial Compliance and Post-Certification Phase

The period between Substantial Compliance Certification and the commencement of advocacy presentations is typically the most critical phase of a Second Request investigation, as it is during this time that FTC Staff conducts its independent analysis of the documentary and economic evidence, formulates its competitive theory, and engages with the parties' counsel to test and refine its understanding of the relevant markets and competitive dynamics. Calderwood & Harkness remained in continuous dialogue with FTC Staff throughout this period, providing prompt and complete responses to all supplemental requests and proactively offering to address any questions or concerns that arose during the Staff's review of the produced materials.

D. Advocacy and Clearance Phase

The timeline from Substantial Compliance Certification (September 22, 2023) through clearance (January 19, 2024) was approximately 119 days, and the overall timeline from Second Request issuance (May 29, 2023) through clearance was 235 calendar days. While this timeline is somewhat longer than the median for transactions that are ultimately cleared without conditions, it is well within the normal range for investigations involving technology-sector transactions with overlapping product lines and alleged vertical integration concerns. Importantly, the timeline reflects the thoroughness and rigor of the FTC's investigation, which in turn lends confidence that the clearance decision is durable and unlikely to be revisited.

IV. PRODUCTION AND COMPLIANCE STATISTICS

This Section provides a detailed summary of the production and compliance statistics for the Solara-side Second Request response. These statistics are presented for the record and to document the scope and completeness of Solara's compliance efforts.

A. Document Collection and Production

The following table summarizes the key document collection and production metrics for the Solara-side response:

The approximately 196,300 documents produced to the FTC represented the universe of non-privileged, responsive documents identified through the multi-tier review process. The substantial reduction from the approximately 1.24 million initially collected documents to the approximately 487,000 reviewed documents reflects the application of de-duplication algorithms, date-range filtering, file-type exclusions (e.g., system files, executable files, and other non-substantive file types), and the removal of documents previously identified as clearly non-responsive through targeted search term analysis. The further reduction from approximately 487,000 reviewed documents to approximately 196,300 produced documents reflects the removal of non-responsive documents and the withholding of documents subject to valid privilege assertions.

B. Structured Data Submissions

Seven structured data submissions were prepared and delivered to the FTC, covering the following categories of information for both Pinnacle and Meridian:

(i) Sales data, including historical revenue by product line, customer, and contract type;

(ii) Pricing data, including standard rate cards, volume discount schedules, and negotiated contract pricing;

(iii) Customer lists, including current and former customers, contract terms, and renewal rates;

(iv) Win/loss data, reflecting competitive bid outcomes, lost customer analyses, and customer churn data;

(v) Market share estimates, drawing from internal planning documents, third-party market research, and management analyses;

(vi) Financial data, including historical and projected income statements, balance sheets, and unit-level economics; and

(vii) Product feature matrices, detailing the functional capabilities and technical specifications of Pinnacle's and Meridian's respective platforms, including module-level feature comparisons.

These data submissions were prepared with the assistance of Solara's and Meridian's respective finance, product, and sales teams, and were validated by Calderwood & Harkness's economic consulting team prior to submission. Where necessary, data was presented in both native and structured (e.g., Excel) formats to facilitate the FTC's independent analysis.

C. Privilege Log

A comprehensive privilege log was prepared and delivered in connection with the Substantial Compliance Certification. The log contained 4,872 individual entries, broken down by privilege basis as follows:

Each privilege log entry contained the information required by the FTC's Second Request specifications, including the date of the document, the author and all recipients, the subject matter (described with sufficient specificity to permit meaningful assessment of the privilege claim without disclosing privileged content), and the specific privilege or protection asserted.

All 4,872 entries were sustained in their entirety. No withheld document was required to be produced as a result of the FTC's privilege challenges, and no privilege assertion was overruled or withdrawn during the course of the investigation. This outcome reflects the rigor and discipline of the privilege review process implemented by Calderwood & Harkness and the Keymark review team.

D. FTC Privilege Challenges — Resolution Summary

The FTC Staff issued two rounds of privilege challenges during the investigation. Both were resolved in Solara's favor without the production of any withheld document.

First Privilege Challenge (November 8, 2023). FTC Staff challenged 214 of the 4,872 privilege log entries. The challenges focused primarily on the adequacy of privilege descriptions for communications involving in-house counsel at Solara and Meridian, as well as the applicability of the common interest doctrine to certain communications among the parties' respective legal teams during the pre-signing due diligence period. Calderwood & Harkness filed a detailed written response on November 15, 2023, providing enhanced descriptions for all 214 challenged entries and supplemental legal authority supporting the common interest assertions. All 214 entries were sustained.

Second Privilege Challenge (December 1, 2023). FTC Staff challenged an additional 47 privilege log entries. These challenges principally concerned communications between Solara's investment team and outside counsel at Calderwood & Harkness relating to the competitive analysis and market definition issues that were central to the Second Request investigation. Calderwood & Harkness filed a response addressing each challenged entry with specificity. All 47 entries were sustained.

In total, 261 of 4,872 privilege log entries (5.4%) were challenged across both rounds, and no documents were required to be produced.

Clawback Agreement. The Clawback / Non-Waiver Agreement executed on June 9, 2023 was not invoked at any point during the engagement, as no inadvertent productions of privileged or protected materials were identified. This result is attributable to the comprehensive privilege review protocols implemented at the outset of the review process and the multiple layers of quality control applied throughout.

E. Supplemental Production

On October 27, 2023, FTC Staff issued 8 supplemental document requests, commonly referred to as "pull-forward requests," seeking documents and data generated or received after the original collection date range specified in the Second Request. The supplemental requests focused on the following areas:

(1) Updated board materials and investment committee memoranda for Solara, Fund IV, and Meridian;

(2) Recent competitive intelligence reports and market analyses;

(3) Customer correspondence and contract amendments executed after the initial collection period;

(4) Product roadmap and development plans for both Pinnacle and Meridian;

(5) Updated financial data, including revised forecasts and budgets;

(6) Communications with potential integration planning teams;

(7) Updated personnel and organizational charts; and

(8) Any revised strategic rationale or synergy analyses prepared since the date of the initial collection.

All supplemental productions were completed by November 17, 2023, within 21 days of receipt of the pull-forward requests. Additional custodial searches were conducted across the 18 Solara-side custodians, and supplemental structured data submissions were prepared as applicable.

V. SUMMARY OF SUBSTANTIVE FTC INVESTIGATION AND ADVOCACY

A. FTC's Competitive Concerns

Throughout the course of its investigation, the FTC Bureau of Competition, Mergers IV Division identified two principal areas of competitive concern arising from the proposed acquisition:

1. Horizontal Overlap in Cloud-Based Portfolio Analytics and Performance Attribution Software. The FTC Staff examined the extent to which Pinnacle's core analytics platform and Meridian's analytics module offered overlapping functionality in the market for cloud-based portfolio analytics and performance attribution software used by institutional asset managers. The Staff's preliminary concern was that the combination of these two platforms could result in a meaningful increase in concentration in this market segment, potentially reducing competitive pressure and enabling the post-merger entity to exercise market power through price increases or reductions in innovation.

The FTC's horizontal analysis focused on the degree of head-to-head competition between Pinnacle and Meridian in analytics functionality, the frequency with which customers considered both platforms as alternatives in competitive procurement processes, and the availability of credible alternative providers in the event of a post-merger price increase.

2. Vertical Foreclosure. The FTC Staff also examined the potential for the post-merger entity to leverage the integration of Meridian's order management system ("OMS") and execution management system ("EMS") with Pinnacle's analytics data to foreclose competing OMS or analytics vendors from the market. The concern was that the combined entity could, through exclusive integration protocols, data-sharing restrictions, or preferential pricing arrangements, make it difficult or uneconomic for institutional investors to use competing OMS platforms alongside Pinnacle's analytics suite, or vice versa, thereby tipping the market toward a bundled, proprietary solution and disadvantaging standalone competitors.

B. Economic Submission and Market Definition

On November 3, 2023, Calderwood & Harkness filed a comprehensive Economic Submission and White Paper with FTC Staff. The White Paper was authored by Dr. Arvind Chakrabarti, Senior Economist in Calderwood & Harkness's Economic Consulting group, with legal framing, strategic direction, and editorial guidance provided by Howard Bellamy and Monica Reyes. The White Paper addressed the following key issues:

Market Definition. The White Paper argued for a broad relevant product market that extends well beyond the narrow category of cloud-based portfolio analytics and performance attribution software to encompass on-premise legacy analytics systems, multi-asset class risk platforms, and general-purpose business intelligence and data visualization tools that are increasingly used by institutional investors for portfolio analytics and reporting purposes. The argument was supported by extensive evidence from customer interviews, industry analyst reports, and internal Pinnacle and Meridian documents demonstrating that customers routinely evaluate and substitute among these various categories of analytics tools based on price, functionality, and integration capabilities. By establishing a broader market definition, the White Paper demonstrated that the combined entity would account for a modest share of a large and competitive market, rather than a dominant share of an artificially narrow market segment.

Geographic Market. The relevant geographic market was defined as North America, consistent with the parties' primary customer base and the competitive dynamics observed in the data. While both Pinnacle and Meridian serve some customers outside North America, the vast majority of their respective revenues — and the competitive interactions most relevant to the FTC's analysis — occur within the North American market.

Market Size and Share Analysis. The White Paper presented detailed market size and share analyses, summarized as follows:

As the table illustrates, the combined entity's share of the North American analytics segment would be approximately 17.74%, a level that is well below the thresholds that have historically prompted enforcement action in technology markets and that is consistent with a competitive market characterized by numerous credible rivals.

Competitive Landscape. The White Paper identified a robust competitive landscape with multiple significant competitors, including:

• Marlowe Asset Management Analytics Corp. — approximately 16% share of the North American analytics segment, offering a comprehensive cloud-based analytics suite with strong penetration among large asset managers and pension funds;

• Arclight Data Systems — approximately 14% share, providing multi-asset class risk and analytics solutions with a particular strength in fixed income and derivatives analytics;

• At least 12 additional competitors — each holding greater than 1% share of the North American analytics segment, including established enterprise software providers, specialized fintech firms, and emerging cloud-native platforms.

The White Paper demonstrated that the post-merger entity would operate in a highly competitive environment, with at least two competitors of comparable or greater scale and numerous smaller but innovative competitors exerting meaningful competitive pressure across all dimensions of competition, including price, product quality, innovation, and customer service.

Absence of Vertical Foreclosure Concern. The White Paper devoted substantial attention to the FTC's vertical foreclosure theory, demonstrating that neither the technical architecture nor the economic incentives of the combined entity would support a foreclosure strategy. Key points included:

• Pinnacle and Meridian both employ open-architecture APIs that are designed to interoperate with a wide range of third-party platforms. As of the date of the submission, Pinnacle's analytics platform maintained active integrations with at least 9 competing OMS and EMS platforms, and Meridian's OMS/EMS maintained active integrations with at least 7 competing analytics providers.

• The combined entity would have no technical ability to foreclose competing platforms, as the open-architecture design is embedded in the parties' existing customer contracts and is a core element of their respective value propositions to institutional investors, who uniformly demand interoperability and multi-vendor flexibility.

• The combined entity would have no economic incentive to foreclose competing platforms, as doing so would risk alienating existing customers who rely on multi-vendor technology stacks and would reduce the overall attractiveness of the combined platform to prospective customers.

These arguments were supported by quantitative analyses prepared by Dr. Chakrabarti, including a vertical arithmetic model demonstrating that the profit loss from customer defection resulting from a foreclosure strategy would substantially exceed any profit gain from increased market share in the foreclosed segment.

C. Advocacy Presentation (December 7, 2023) and Senior Staff Briefing (December 19, 2023)

On December 7, 2023, Howard Bellamy, Monica Reyes, and Dr. Arvind Chakrabarti delivered a formal advocacy presentation to the FTC Bureau of Competition, Mergers IV Division staff. The presentation was structured around the following key themes:

(1) The competitive landscape for cloud-based analytics and portfolio management software is broad, dynamic, and highly competitive, with numerous well-resourced competitors and low barriers to innovation;

(2) The combined entity's market share, even under the narrowest plausible market definition, would remain moderate and would not confer market power;

(3) The horizontal overlap between Pinnacle and Meridian in analytics functionality is limited, as Pinnacle's core strength lies in portfolio construction, risk modeling, and ESG scoring, while Meridian's analytics module is primarily a reporting and attribution tool ancillary to its core OMS/EMS functionality;

(4) The vertical foreclosure theory is unsupported by the technical architecture, customer contract terms, or economic incentives of the combined entity;

(5) The transaction is expected to generate substantial procompetitive efficiencies through the creation of an integrated front-to-back-office technology platform that would enhance product quality, accelerate innovation, and deliver cost savings to institutional investors; and

(6) Customer feedback collected by the FTC during the investigation was broadly supportive of the transaction and reflected no material concerns regarding competitive harm.

On December 19, 2023, a Senior Staff briefing was conducted at the FTC, attended by senior officials within the Bureau of Competition. The briefing reinforced the key arguments advanced during the December 7 presentation and addressed certain follow-up questions raised by the Staff during the intervening period.

Following the Senior Staff briefing, the FTC ultimately determined not to challenge the transaction. The waiting period expired on January 19, 2024, and the matter was closed without the imposition of any conditions.

VI. SATISFACTION OF ANTITRUST CONDITION UNDER THE MERGER AGREEMENT

The Merger Agreement contains, at Section 7.1(b), a condition to closing requiring the expiration or termination of all applicable waiting periods under the HSR Act (including any extended waiting period resulting from a Second Request) without the imposition of any injunction, order, judgment, decree, or other governmental action prohibiting, restraining, or otherwise preventing the consummation of the transactions contemplated by the Merger Agreement.

With the waiting period expiring on January 19, 2024, without the FTC taking any enforcement action or seeking to block the transaction, this condition is now fully and unconditionally satisfied. Specifically:

• The HSR Act waiting period has expired in full;

• No injunction, temporary restraining order, or other judicial or administrative order has been entered prohibiting or restraining the consummation of the transaction;

• No consent decree has been entered;

• No hold-separate order has been imposed;

• No divestiture, licensing, or other structural remedy has been required;

• No behavioral commitment, monitoring obligation, or other condition has been imposed; and

• No ongoing investigation or enforcement proceeding remains pending before the FTC or the DOJ with respect to the transaction.

We also note that the Outside Date under the Merger Agreement is April 14, 2024, which is 12 months from the date of signing. The Merger Agreement further provides for an automatic three-month extension of the Outside Date to July 14, 2024, in the event that the antitrust condition is the sole remaining unsatisfied closing condition as of the initial Outside Date. Given that FTC clearance has been obtained as of January 19, 2024, well in advance of the Outside Date, this extension provision is now moot, and the parties have ample time to complete the remaining closing deliverables and consummate the transaction.

VII. ENGAGEMENT COST SUMMARY

The following is a summary of the total Solara-side costs incurred in connection with the Second Request compliance process, from the commencement of the Calderwood & Harkness engagement on May 30, 2023 through FTC clearance on January 19, 2024.

A. Calderwood & Harkness LLP Legal Fees

Estimated total Calderwood & Harkness legal fees through clearance: $5,740,000

The Calderwood & Harkness team members and their applicable billing rates were as follows:

The legal fees include all time and charges incurred for Second Request compliance strategy and management, custodian interviews and coordination, document review supervision and quality control, privilege log preparation and defense, structured data submission preparation, economic analysis and White Paper drafting, advocacy preparation and presentation, FTC Staff communications and negotiations, and related advisory services.

B. Keymark Document Solutions LLC Vendor Costs

Estimated total Keymark vendor costs: $1,820,000

Keymark's charges encompassed document processing, de-duplication, hosting in the Crestline Technologies platform, the staffing and management of the 22-person contract review attorney team, quality control workflows, privilege log assembly assistance, and production formatting. Daniel S. Fong of Keymark served as Project Manager for the engagement.

C. Total Solara-Side Second Request Compliance Cost

A final invoice covering all remaining fees and costs will follow separately under cover of a matter closing letter. All fees and costs have been incurred pursuant to the engagement letter dated May 30, 2023, and the terms and conditions set forth therein.

We note that the costs summarized above reflect only the Solara-side compliance costs. Pinnacle-side compliance costs, which were managed by Hargrove, Pelletier & Stein LLP, are not included in this summary and are expected to be addressed separately between Pinnacle and its counsel.

VIII. NEXT STEPS FOR TRANSACTION CLOSING

With the antitrust condition now satisfied, the parties should move promptly to complete the remaining closing deliverables and consummate the transaction. The following items require attention in the near term.

A. Financing Arrangements

Solara should coordinate with Briarcliff National Bank, N.A. — Karen P. Aldridge, Relationship Manager — regarding the $825 million senior secured term loan facility that constitutes the debt financing component of the transaction. Specifically, Solara should confirm the satisfaction of all conditions precedent to drawdown under the credit agreement, including any required regulatory approvals, solvency certifications, officer's certificates, and the delivery of customary closing documents to the lender group. Calderwood & Harkness is available to assist with the review of any financing-related regulatory conditions, although we understand that Quelston & Harte LLP serves as Solara's primary financing counsel for this transaction.

B. Closing Mechanics

Calderwood & Harkness recommends that Solara promptly initiate the following closing mechanics:

(1) Coordination with Pinnacle / Sellers' Counsel. Coordinate with Hargrove, Pelletier & Stein LLP (Catherine A. Pelletier, Lead Partner) and Ashford Crane LLP (Robert T. Ishikawa, counsel to Thorngate Capital Partners LP as Sellers' Representative) on the satisfaction of all remaining closing conditions under the Merger Agreement, including the bring-down of representations and warranties, the absence of a material adverse effect, the delivery of required officer's certificates and legal opinions, and the satisfaction of any third-party consent requirements.

(2) Non-Antitrust Conditions Precedent. Confirm that all non-antitrust conditions precedent to closing, including conditions relating to the accuracy of representations and warranties, the absence of a material adverse effect, the completion of required corporate approvals, and the receipt of all necessary third-party consents (including any key customer or vendor consents required by the Merger Agreement), remain satisfied or are reasonably expected to be satisfied as of the anticipated closing date.

(3) Rollover Equity Documentation. Finalize the rollover equity documentation governing the approximately $440 million in rollover equity contributions from Pinnacle management and existing investors, including the rollover subscription agreements, management equity plan documents, and any related stockholders' agreement or limited partnership agreement amendments for the post-closing holding structure.

(4) Financial Advisor Coordination. Coordinate with Redstone Advisory Group LLC (Elaine C. Davenport, Managing Director), financial advisor to Solara, on the preparation and execution of the closing funds flow memorandum, including the allocation of cash consideration among the Sellers, the funding of any escrow or holdback amounts, and the disbursement of transaction-related expenses.

(5) Closing Financial Deliverables. Coordinate with Fielding & Cascade Insurance Brokers (Thomas R. Sennett, Engagement Partner) regarding the preparation and delivery of any required closing balance sheet, working capital calculations, or other financial deliverables for Pinnacle as specified in the Merger Agreement.

C. Data Retention and Privilege Protection

Calderwood & Harkness will retain all matter files generated in connection with the Second Request engagement, including but not limited to privilege logs, work product memoranda, advocacy materials, internal analyses, correspondence with the FTC, and all related documentation. These files will be maintained in accordance with Calderwood & Harkness's document retention policy and will remain available to Solara upon request, subject to applicable privilege and confidentiality protections.

All materials produced to the FTC during the investigation remain subject to the terms of the FTC's Model Stipulated Protective Order and the Clawback / Non-Waiver Agreement executed on June 9, 2023. Solara and its affiliates should be mindful of these continuing obligations when handling any copies of produced materials retained in their own files.

We recommend that Solara and Meridian implement formal litigation hold release procedures for the 18 Solara-side custodians whose documents were collected in connection with the Second Request. Prior to releasing any litigation hold, Solara should confirm with its internal legal team and other outside counsel that no other pending or reasonably anticipated litigation, regulatory investigation, or governmental inquiry requires the continued preservation of any of the materials subject to the current hold. Calderwood & Harkness is available to consult on the scope and timing of any hold release.

D. Post-Closing HSR Considerations

No ongoing reporting, monitoring, or compliance obligations were imposed by the FTC as a condition of clearance. Accordingly, there are no post-closing antitrust obligations arising from the Second Request investigation itself.

However, the parties should ensure that standard HSR Act post-closing administrative obligations are addressed as part of the closing checklist. These obligations include the notification to the FTC and the DOJ of the consummation of the transaction, which is customarily provided within a reasonable period following closing. Calderwood & Harkness will prepare and submit this notification on Solara's behalf as part of our closing assistance.

IX. CONCLUSION

The FTC Second Request investigation arising from the proposed acquisition of Pinnacle Cloud Systems, Inc. by Solara Digital Infrastructure Fund IV LP concluded successfully with FTC clearance on January 19, 2024, after a total investigative timeline of 235 calendar days from the issuance of the Second Request on May 29, 2023. No enforcement action was initiated, no consent decree or remedial order was entered, and no divestiture, behavioral commitment, or other condition was imposed.

The antitrust condition to closing under Section 7.1(b) of the Merger Agreement is fully and unconditionally satisfied, and the transaction may proceed to closing within the timeframe contemplated by the Merger Agreement, well in advance of the Outside Date.

We believe this result reflects the strength of the competitive merits of the transaction, the thoroughness of the compliance effort, and the effectiveness of the advocacy strategy pursued throughout the investigation. Calderwood & Harkness is proud to have represented Solara in this matter and remains available to assist with any residual antitrust matters, closing-related issues, or other needs that may arise as the transaction proceeds to consummation.

Should you have any questions regarding this memorandum or any aspect of the Second Request process, please do not hesitate to contact us at your convenience.

Howard Bellamy, Direct: (202) 555-7412	hbellamy@calderwoodharkness.com
Monica Reyes, Direct: (202) 555-7438	mreyes@calderwoodharkness.com

Calderwood & Harkness LLP 1900 K Street NW, Suite 800 Washington, DC 20006 Main: (202) 555-7400

Respectfully submitted,

CALDERWOOD & HARKNESS LLP

By: ________

Howard Bellamy Partner, Antitrust & Competition Group

By: ________

Monica Reyes Senior Associate, Antitrust & Competition Group

ENCLOSURES / ATTACHMENTS

No enclosures are attached to this memorandum. For reference purposes, the following documents were generated in connection with the engagement and are maintained in Calderwood & Harkness's matter files:

1. Engagement Letter, dated May 30, 2023, between Calderwood & Harkness LLP and Solara Digital Infrastructure GP LLC;

2. Substantial Compliance Certification and Accompanying Letter, dated September 22, 2023, filed with the FTC on behalf of Solara Digital Infrastructure Fund IV LP;

3. Economic Submission / White Paper, dated November 3, 2023, authored by Dr. Arvind Chakrabarti, with legal framing by Howard Bellamy and Monica Reyes;

4. Response to FTC First Privilege Challenge, dated November 15, 2023;

5. Response to FTC Second Privilege Challenge, dated December 2023; and

6. Advocacy Presentation Deck, dated December 7, 2023.

Copies of these materials are available upon request from Calderwood & Harkness.

DISTRIBUTION

DISTRIBUTION LIMITED. This memorandum is addressed exclusively to Graham A. Whitfield, Founding Partner & CEO, and Sandra K. Levinson, Co-Managing Partner & CIO, of Solara Digital Infrastructure GP LLC. This memorandum constitutes a privileged and confidential attorney-client communication and is not to be distributed, forwarded, copied, or disclosed to any other person or entity without the prior written approval of Calderwood & Harkness LLP. Any unauthorized disclosure may result in the waiver of attorney-client privilege and/or work product protection.

Date	Event
April 14, 2023	Merger Agreement executed by and among Solara Digital Infrastructure Fund IV LP, PCS Acquisition Corp., Pinnacle Cloud Systems, Inc., Thorngate Capital Partners LP (as Sellers' Representative), and the Sellers named therein.
April 28, 2023	HSR Act premerger notification filings submitted by both parties to the FTC and DOJ. Filing fee of $450,000 paid by Solara.
May 28, 2023	Original expiration date of the initial 30-day waiting period; extended by one day to May 29, 2023 by mutual agreement with FTC Staff.
May 29, 2023	FTC Second Request issued by Bureau of Competition, Mergers IV Division (FTC File No. 231-0487), containing 47 specifications.
May 30, 2023	Calderwood & Harkness LLP engagement letter executed; formal engagement of Calderwood & Harkness to manage all aspects of Second Request compliance, advocacy, and related matters.
Date	Event
June 2, 2023	Compliance strategy memorandum delivered to Solara management, outlining the anticipated scope, timeline, budget, and key decision points for the Second Request response.
June 7, 2023	Custodian identification and collection protocol finalized. A total of 18 Solara-side custodians were identified: 12 from the Solara GP/Fund IV management and investment team, and 6 from Meridian management, including Meridian CEO Priya N. Raghavan. Custodian interviews commenced immediately thereafter.
June 9, 2023	Clawback / Non-Waiver Agreement executed with FTC Staff, governing the treatment of any inadvertent production of privileged materials. The agreement was drafted to incorporate the principles set forth in Federal Rule of Evidence 502(d) and the terms of the FTC's Model Stipulated Protective Order, providing robust protection against any claim of privilege waiver arising from inadvertent disclosure during the production process.
June 15, 2023	Privilege review protocol and detailed review guidelines disseminated to the 22-person contract review team managed by Keymark Document Solutions LLC ("Keymark"). Daniel S. Fong of Keymark served as Project Manager for the document review. The review was conducted using a hosted Crestline Technologies platform, with customized coding panels, privilege tagging protocols, and quality control workflows designed to ensure accuracy and consistency across the large review population.
June – September 2023	Document collection, processing, first-level and second-level review, and production to the FTC. Approximately 1.24 million documents were collected from Solara-side custodians and non-custodial sources. After de-duplication, date filtering, file-type exclusion, and removal of system-generated files, approximately 487,000 documents were submitted for human review for responsiveness, privilege, and confidentiality designations.
Date	Event
September 22, 2023	Solara Substantial Compliance Certification filed with the FTC, 116 days after the issuance of the Second Request. The certification covered the production of approximately 196,300 documents (Bates range SDILP-2R-000001 through SDILP-2R-196300), 7 structured data submissions, and a comprehensive privilege log containing 4,872 entries.
October 6, 2023	Pinnacle Substantial Compliance Certification filed by Hargrove, Pelletier & Stein LLP, counsel to Pinnacle and the Sellers. Catherine A. Pelletier served as Lead Partner on the Pinnacle-side engagement, assisted by David L. Morrissette, Associate.
October 27, 2023	FTC Staff issued 8 supplemental document requests (commonly referred to as "pull-forward requests"), seeking updated documents and data for periods subsequent to the original collection date range specified in the Second Request.
November 3, 2023	Economic Submission / White Paper filed with FTC Staff. The submission was authored by Dr. Arvind Chakrabarti, Senior Economist in Calderwood & Harkness's Economic Consulting group, with legal framing and strategic direction provided by Howard Bellamy and Monica Reyes. The White Paper addressed market definition, market share analysis, competitive effects, and the absence of vertical foreclosure concerns, as discussed in detail in Section V below.
November 8, 2023	FTC Staff issued its first privilege challenge, challenging 214 of the 4,872 entries on the Solara privilege log. The challenges primarily focused on the adequacy of privilege descriptions and assertions of common interest privilege.
November 15, 2023	Calderwood & Harkness filed a comprehensive response to the first privilege challenge, providing enhanced descriptions for all 214 challenged entries. All 214 entries were sustained without the production of any underlying document.
November 17, 2023	Supplemental production completed in response to the 8 pull-forward requests issued on October 27, 2023. Additional custodial searches were conducted, and supplemental data submissions were included as applicable to bring all structured data current through the most recent available reporting period.
Date	Event
December 1, 2023	FTC Staff issued its second privilege challenge, challenging an additional 47 entries on the Solara privilege log.
December 7, 2023	Formal advocacy presentation delivered to FTC Bureau of Competition, Mergers IV Division staff by Howard Bellamy, Monica Reyes, and Dr. Arvind Chakrabarti. The presentation addressed the FTC's two identified areas of competitive concern — horizontal overlap in cloud-based analytics and potential vertical foreclosure — and presented detailed economic evidence and legal argument demonstrating the absence of competitive harm.
December 19, 2023	Senior Staff briefing conducted at the FTC. The briefing was attended by senior officials within the Bureau of Competition and reinforced the key arguments advanced during the December 7 advocacy presentation.
January 19, 2024	FTC clearance obtained. The waiting period expired without the FTC taking any enforcement action or seeking to block the transaction. The matter was closed, and no consent decree, hold-separate order, divestiture, behavioral remedy, or any other condition was imposed.

Metric	Volume
Total documents collected (Solara side)	~1,240,000
Documents reviewed after de-duplication and filtering	~487,000
Documents produced to FTC	~196,300
Bates range	SDILP-2R-000001 through SDILP-2R-196300
Solara-side custodians	18 (12 Solara GP/Fund IV; 6 Meridian)
Pinnacle-side custodians (managed by Hargrove, Pelletier & Stein LLP)	14
Privilege Basis	Number of Entries	Percentage
Attorney-client privilege	3,641	74.8%
Work product doctrine	894	18.4%
Joint defense / common interest privilege	337	6.8%
Total	4,872	100.0%
Metric	Value
Global Total Addressable Market (TAM)	$11.8 billion
North American TAM	$6.2 billion
North American Analytics Segment TAM	$1.84 billion
Pinnacle analytics revenue (74.68% of $387M total revenue)	$289 million
Pinnacle standalone analytics share (NA analytics segment)	~12.4%
Meridian analytics module revenue (17.64% of $212M total revenue)	$37.4 million
Meridian standalone analytics share (NA analytics segment)	~5.2%
Combined analytics revenue	$326.4 million
Combined analytics share (NA analytics segment)	~17.74%
Professional	Role	Billing Rate
Howard Bellamy	Partner, Antitrust & Competition Group	$1,650/hr
Monica Reyes	Senior Associate (Year 7), Antitrust & Competition Group	$1,050/hr

Elliot Nguyen	Associate (Year 4), Antitrust & Competition Group	$825/hr
Tamara J. Westbrook	Of Counsel, E-discovery & Information Governance	$975/hr
Dr. Arvind Chakrabarti	Senior Economist, Economic Consulting	$1,200/hr
Cost Category	Amount
Calderwood & Harkness LLP legal fees	$5,740,000
Keymark Document Solutions LLC vendor costs	$1,820,000
Total	$7,560,000

PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION
This memorandum and all attachments hereto constitute a privileged and confidential attorney-client communication prepared by Calderwood & Harkness LLP for the exclusive use of the addressees identified below. This document contains legal advice, attorney work product, and confidential business information. Any unauthorized review, use, disclosure, copying, or distribution of this memorandum or any information contained herein is strictly prohibited. If you have received this memorandum in error, please contact Calderwood & Harkness LLP immediately at (202) 555-7400.
MEMORANDUM
FROM: Howard Bellamy, Partner, and Monica Reyes, Senior Associate Calderwood & Harkness LLP 1900 K Street NW, Suite 800 Washington, DC 20006
TO: Graham A. Whitfield, Founding Partner & CEO, and Sandra K. Levinson, Co-Managing Partner & CIO Solara Digital Infrastructure GP LLC 200 Tatnall Street, Suite 1400 Wilmington, DE 19801
DATE: January 22, 2024
RE: Post-Clearance Status Report — FTC Second Request Compliance, FTC File No. 231-0487; Proposed Acquisition of Pinnacle Cloud Systems, Inc. by Solara Digital Infrastructure Fund IV LP
MATTER NO.: 1041-00001
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I. EXECUTIVE SUMMARY
The purpose of this memorandum is to provide a comprehensive summary of the outcome of the Federal Trade Commission ("FTC") Second Request investigation and the resulting clearance of the proposed acquisition of Pinnacle Cloud Systems, Inc. ("Pinnacle" or the "Target") by Solara Digital Infrastructure Fund IV LP ("Fund IV"), through its wholly owned indirect acquisition subsidiary PCS Acquisition Corp. ("Merger Sub"). This memorandum is intended to serve as the definitive record of the antitrust clearance process, to confirm the satisfaction of the antitrust condition precedent under the governing transaction documents, and to outline the remaining steps necessary to bring the transaction to a successful closing.
Key Result. On January 19, 2024, the FTC allowed the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, 15 U.S.C. § 18a (the "HSR Act"), to expire without taking any enforcement action, thereby clearing the transaction for consummation. The FTC's decision not to challenge the acquisition represents an unconditional clearance — no consent decree, remedial order, divestiture requirement, behavioral commitment, or any other condition was imposed upon the parties.
The FTC's Second Request was issued on May 29, 2023, and clearance was obtained 235 calendar days later. The investigation was conducted by the Bureau of Competition, Mergers IV Division, and involved an extensive review of the competitive landscape in cloud-based portfolio analytics, performance attribution software, and related order management and execution management systems for institutional investors. Following substantial compliance certifications by both Solara and Pinnacle, the filing of a comprehensive Economic Submission, two rounds of privilege challenges (all of which were fully sustained in Solara's favor), an advocacy presentation to FTC Staff, and a Senior Staff briefing, the Commission ultimately determined not to seek to block the proposed transaction.
Satisfaction of Closing Condition. The antitrust condition precedent contained in Section 7.1(b) of the Stock Purchase Agreement dated April 14, 2023 (the "Merger Agreement"), which required the expiration or termination of all applicable waiting periods under the HSR Act without the imposition of any injunction, order, or other governmental action prohibiting consummation of the transaction, is now fully satisfied. The transaction may proceed to closing within the timeframe contemplated by the Merger Agreement, well in advance of the Outside Date of April 14, 2024.
Engagement Cost Summary. Total Solara-side Second Request compliance costs were approximately $7.56 million, consisting of approximately $5.74 million in Calderwood & Harkness LLP legal fees and approximately $1.82 million in document review, processing, and hosting costs charged by Keymark Document Solutions LLC. A final invoice and matter closing letter will follow separately under cover of the engagement letter dated May 30, 2023.
We are pleased with this outcome and believe it reflects both the strength of the merits of this transaction and the effectiveness of the advocacy strategy pursued throughout the investigation. The sections that follow provide a detailed account of the transaction background, the chronology of the Second Request process, production and compliance statistics, the substance of the FTC's investigation and our advocacy efforts, the satisfaction of the Merger Agreement's antitrust condition, a summary of engagement costs, and recommended next steps for closing.
II. BACKGROUND AND TRANSACTION OVERVIEW
A. Transaction Structure
The proposed transaction involves the acquisition of 100% of the outstanding capital stock of Pinnacle Cloud Systems, Inc., a Delaware corporation, by Solara Digital Infrastructure Fund IV LP, a Delaware limited partnership, acting through PCS Acquisition Corp., a newly formed Delaware corporation and wholly owned indirect subsidiary of Fund IV. The transaction is structured as a stock purchase, with Merger Sub acquiring all outstanding shares of Pinnacle's common stock from the Sellers identified in the Merger Agreement.
The aggregate enterprise value of the transaction is approximately $1.63 billion, consisting of approximately $1.19 billion in cash consideration and approximately $440 million in rollover equity contributions from Pinnacle management and certain existing investors. The rollover equity component represents approximately 27% of the total enterprise value, reflecting a meaningful continuing investment by Pinnacle's management team and key stakeholders in the combined business on a go-forward basis.
On an implied multiples basis, the $1.63 billion enterprise value represents approximately 4.21x Pinnacle's last-twelve-months ("LTM") revenue of approximately $387 million and approximately 21.85x Pinnacle's LTM EBITDA of approximately $74.6 million. These multiples are broadly consistent with prevailing valuation benchmarks for high-growth, recurring-revenue SaaS companies in the financial technology sector, and reflect the strategic premium associated with Pinnacle's differentiated market position and the anticipated synergies from the combination with Meridian Workflow Solutions, Inc.
B. Strategic Rationale
The strategic rationale for the acquisition is to combine Pinnacle's cloud-based portfolio analytics, risk modeling, ESG scoring, and performance attribution platform with Solara's existing portfolio company, Meridian Workflow Solutions, Inc. ("Meridian"), a SaaS-based trade execution and order management platform serving institutional asset managers, asset owners, and multi-strategy hedge funds. The combination is intended to create an integrated front-to-back-office technology stack for institutional investors, enabling seamless workflow from trade ideation and analytics through execution, settlement, and performance reporting within a single, unified platform.
Pinnacle's core strengths lie in its proprietary analytics engine, which provides real-time portfolio construction and optimization, multi-factor risk decomposition, forward-looking stress testing, and ESG integration scoring capabilities. Meridian's strengths, by contrast, are concentrated in trade execution, order management, compliance workflows, and post-trade processing. The integration of these complementary capabilities is expected to generate significant revenue synergies through cross-selling opportunities, enhanced customer retention, and accelerated product development, as well as cost synergies from the consolidation of overlapping infrastructure and administrative functions.
C. Transaction Documentation
The Merger Agreement was executed on April 14, 2023, by and among Solara Digital Infrastructure Fund IV LP, PCS Acquisition Corp., Pinnacle Cloud Systems, Inc., Thorngate Capital Partners LP (acting in its capacity as the Sellers' Representative), and the Sellers named therein. The Merger Agreement contains customary representations and warranties, pre-closing covenants, closing conditions (including the antitrust condition discussed in Section VI below), indemnification provisions, and termination rights.
D. HSR Act Filing and Second Request
The parties submitted their respective HSR Act premerger notification filings to the FTC and the Antitrust Division of the U.S. Department of Justice ("DOJ") on April 28, 2023. The required filing fee of $450,000 was paid at the time of filing, calculated on the basis of the aggregate transaction value. The initial 30-day statutory waiting period was set to expire on May 28, 2023; however, by mutual agreement with FTC Staff, the expiration was extended by one day to May 29, 2023, to accommodate a staff scheduling matter.
On May 29, 2023, the FTC Bureau of Competition, Mergers IV Division, issued a Second Request for Additional Information and Documentary Material (the "Second Request"), bearing FTC File No. 231-0487. The Second Request contained 47 individual specifications covering a broad range of documents, data, and information relating to the parties' respective businesses, competitive dynamics, market structure, pricing, customers, and the strategic rationale for the transaction. The issuance of the Second Request triggered a new waiting period that would not expire until 30 days after both parties had substantially complied with all of the Second Request's specifications.
On May 30, 2023, Calderwood & Harkness LLP was formally engaged by Solara Digital Infrastructure GP LLC to handle all aspects of Second Request compliance, privilege review, economic analysis and submissions, and advocacy before the FTC in connection with the investigation. Monica Reyes, Senior Associate, served as the day-to-day lead on the engagement, under the overall direction and supervision of Howard Bellamy, Partner.
III. CHRONOLOGY OF KEY EVENTS AND MILESTONES
The following is a detailed chronological summary of the principal events and milestones in the Second Request investigation, from the execution of the Merger Agreement through FTC clearance.
A. Pre-Second Request Phase
The issuance of a Second Request, while not unusual for transactions of this size and involving overlapping technology platforms in concentrated market segments, required the immediate mobilization of substantial legal, economic, and document management resources. Calderwood & Harkness assembled a cross-functional team comprising antitrust attorneys, e-discovery specialists, and economic consultants to manage the compliance process on an accelerated timetable.
B. Document Collection and Review Phase
The document review phase was the most resource-intensive portion of the Second Request compliance process. Calderwood & Harkness, in coordination with Keymark, implemented a multi-tier review workflow consisting of first-level responsiveness and privilege review, second-level quality control review, and senior attorney privilege review for all documents flagged as potentially privileged. The review team operated on an accelerated schedule, with the objective of achieving Substantial Compliance Certification within approximately four months of the Second Request's issuance — a timeline that, while aggressive, was achievable given the focused nature of the custodial population and the disciplined application of the agreed-upon search term and date-range protocols negotiated with FTC Staff.
Throughout the collection and review phase, Calderwood & Harkness maintained regular communication with FTC Staff regarding the scope and pace of compliance, and negotiated modifications to certain specifications where appropriate to reduce the burden of production without compromising the completeness of the evidentiary record. These negotiations included agreements on custodian prioritization, date ranges for certain document categories, and the format and structure of the structured data submissions.
C. Substantial Compliance and Post-Certification Phase
The period between Substantial Compliance Certification and the commencement of advocacy presentations is typically the most critical phase of a Second Request investigation, as it is during this time that FTC Staff conducts its independent analysis of the documentary and economic evidence, formulates its competitive theory, and engages with the parties' counsel to test and refine its understanding of the relevant markets and competitive dynamics. Calderwood & Harkness remained in continuous dialogue with FTC Staff throughout this period, providing prompt and complete responses to all supplemental requests and proactively offering to address any questions or concerns that arose during the Staff's review of the produced materials.
D. Advocacy and Clearance Phase
The timeline from Substantial Compliance Certification (September 22, 2023) through clearance (January 19, 2024) was approximately 119 days, and the overall timeline from Second Request issuance (May 29, 2023) through clearance was 235 calendar days. While this timeline is somewhat longer than the median for transactions that are ultimately cleared without conditions, it is well within the normal range for investigations involving technology-sector transactions with overlapping product lines and alleged vertical integration concerns. Importantly, the timeline reflects the thoroughness and rigor of the FTC's investigation, which in turn lends confidence that the clearance decision is durable and unlikely to be revisited.
IV. PRODUCTION AND COMPLIANCE STATISTICS
This Section provides a detailed summary of the production and compliance statistics for the Solara-side Second Request response. These statistics are presented for the record and to document the scope and completeness of Solara's compliance efforts.
A. Document Collection and Production
The following table summarizes the key document collection and production metrics for the Solara-side response:
The approximately 196,300 documents produced to the FTC represented the universe of non-privileged, responsive documents identified through the multi-tier review process. The substantial reduction from the approximately 1.24 million initially collected documents to the approximately 487,000 reviewed documents reflects the application of de-duplication algorithms, date-range filtering, file-type exclusions (e.g., system files, executable files, and other non-substantive file types), and the removal of documents previously identified as clearly non-responsive through targeted search term analysis. The further reduction from approximately 487,000 reviewed documents to approximately 196,300 produced documents reflects the removal of non-responsive documents and the withholding of documents subject to valid privilege assertions.
B. Structured Data Submissions
Seven structured data submissions were prepared and delivered to the FTC, covering the following categories of information for both Pinnacle and Meridian:
(i) Sales data, including historical revenue by product line, customer, and contract type;
(ii) Pricing data, including standard rate cards, volume discount schedules, and negotiated contract pricing;
(iii) Customer lists, including current and former customers, contract terms, and renewal rates;
(iv) Win/loss data, reflecting competitive bid outcomes, lost customer analyses, and customer churn data;
(v) Market share estimates, drawing from internal planning documents, third-party market research, and management analyses;
(vi) Financial data, including historical and projected income statements, balance sheets, and unit-level economics; and
(vii) Product feature matrices, detailing the functional capabilities and technical specifications of Pinnacle's and Meridian's respective platforms, including module-level feature comparisons.
These data submissions were prepared with the assistance of Solara's and Meridian's respective finance, product, and sales teams, and were validated by Calderwood & Harkness's economic consulting team prior to submission. Where necessary, data was presented in both native and structured (e.g., Excel) formats to facilitate the FTC's independent analysis.
C. Privilege Log
A comprehensive privilege log was prepared and delivered in connection with the Substantial Compliance Certification. The log contained 4,872 individual entries, broken down by privilege basis as follows:
Each privilege log entry contained the information required by the FTC's Second Request specifications, including the date of the document, the author and all recipients, the subject matter (described with sufficient specificity to permit meaningful assessment of the privilege claim without disclosing privileged content), and the specific privilege or protection asserted.
All 4,872 entries were sustained in their entirety. No withheld document was required to be produced as a result of the FTC's privilege challenges, and no privilege assertion was overruled or withdrawn during the course of the investigation. This outcome reflects the rigor and discipline of the privilege review process implemented by Calderwood & Harkness and the Keymark review team.
D. FTC Privilege Challenges — Resolution Summary
The FTC Staff issued two rounds of privilege challenges during the investigation. Both were resolved in Solara's favor without the production of any withheld document.
First Privilege Challenge (November 8, 2023). FTC Staff challenged 214 of the 4,872 privilege log entries. The challenges focused primarily on the adequacy of privilege descriptions for communications involving in-house counsel at Solara and Meridian, as well as the applicability of the common interest doctrine to certain communications among the parties' respective legal teams during the pre-signing due diligence period. Calderwood & Harkness filed a detailed written response on November 15, 2023, providing enhanced descriptions for all 214 challenged entries and supplemental legal authority supporting the common interest assertions. All 214 entries were sustained.
Second Privilege Challenge (December 1, 2023). FTC Staff challenged an additional 47 privilege log entries. These challenges principally concerned communications between Solara's investment team and outside counsel at Calderwood & Harkness relating to the competitive analysis and market definition issues that were central to the Second Request investigation. Calderwood & Harkness filed a response addressing each challenged entry with specificity. All 47 entries were sustained.
In total, 261 of 4,872 privilege log entries (5.4%) were challenged across both rounds, and no documents were required to be produced.
Clawback Agreement. The Clawback / Non-Waiver Agreement executed on June 9, 2023 was not invoked at any point during the engagement, as no inadvertent productions of privileged or protected materials were identified. This result is attributable to the comprehensive privilege review protocols implemented at the outset of the review process and the multiple layers of quality control applied throughout.
E. Supplemental Production
On October 27, 2023, FTC Staff issued 8 supplemental document requests, commonly referred to as "pull-forward requests," seeking documents and data generated or received after the original collection date range specified in the Second Request. The supplemental requests focused on the following areas:
(1) Updated board materials and investment committee memoranda for Solara, Fund IV, and Meridian;
(2) Recent competitive intelligence reports and market analyses;
(3) Customer correspondence and contract amendments executed after the initial collection period;
(4) Product roadmap and development plans for both Pinnacle and Meridian;
(5) Updated financial data, including revised forecasts and budgets;
(6) Communications with potential integration planning teams;
(7) Updated personnel and organizational charts; and
(8) Any revised strategic rationale or synergy analyses prepared since the date of the initial collection.
All supplemental productions were completed by November 17, 2023, within 21 days of receipt of the pull-forward requests. Additional custodial searches were conducted across the 18 Solara-side custodians, and supplemental structured data submissions were prepared as applicable.
V. SUMMARY OF SUBSTANTIVE FTC INVESTIGATION AND ADVOCACY
A. FTC's Competitive Concerns
Throughout the course of its investigation, the FTC Bureau of Competition, Mergers IV Division identified two principal areas of competitive concern arising from the proposed acquisition:
1. Horizontal Overlap in Cloud-Based Portfolio Analytics and Performance Attribution Software. The FTC Staff examined the extent to which Pinnacle's core analytics platform and Meridian's analytics module offered overlapping functionality in the market for cloud-based portfolio analytics and performance attribution software used by institutional asset managers. The Staff's preliminary concern was that the combination of these two platforms could result in a meaningful increase in concentration in this market segment, potentially reducing competitive pressure and enabling the post-merger entity to exercise market power through price increases or reductions in innovation.
The FTC's horizontal analysis focused on the degree of head-to-head competition between Pinnacle and Meridian in analytics functionality, the frequency with which customers considered both platforms as alternatives in competitive procurement processes, and the availability of credible alternative providers in the event of a post-merger price increase.
2. Vertical Foreclosure. The FTC Staff also examined the potential for the post-merger entity to leverage the integration of Meridian's order management system ("OMS") and execution management system ("EMS") with Pinnacle's analytics data to foreclose competing OMS or analytics vendors from the market. The concern was that the combined entity could, through exclusive integration protocols, data-sharing restrictions, or preferential pricing arrangements, make it difficult or uneconomic for institutional investors to use competing OMS platforms alongside Pinnacle's analytics suite, or vice versa, thereby tipping the market toward a bundled, proprietary solution and disadvantaging standalone competitors.
B. Economic Submission and Market Definition
On November 3, 2023, Calderwood & Harkness filed a comprehensive Economic Submission and White Paper with FTC Staff. The White Paper was authored by Dr. Arvind Chakrabarti, Senior Economist in Calderwood & Harkness's Economic Consulting group, with legal framing, strategic direction, and editorial guidance provided by Howard Bellamy and Monica Reyes. The White Paper addressed the following key issues:
Market Definition. The White Paper argued for a broad relevant product market that extends well beyond the narrow category of cloud-based portfolio analytics and performance attribution software to encompass on-premise legacy analytics systems, multi-asset class risk platforms, and general-purpose business intelligence and data visualization tools that are increasingly used by institutional investors for portfolio analytics and reporting purposes. The argument was supported by extensive evidence from customer interviews, industry analyst reports, and internal Pinnacle and Meridian documents demonstrating that customers routinely evaluate and substitute among these various categories of analytics tools based on price, functionality, and integration capabilities. By establishing a broader market definition, the White Paper demonstrated that the combined entity would account for a modest share of a large and competitive market, rather than a dominant share of an artificially narrow market segment.
Geographic Market. The relevant geographic market was defined as North America, consistent with the parties' primary customer base and the competitive dynamics observed in the data. While both Pinnacle and Meridian serve some customers outside North America, the vast majority of their respective revenues — and the competitive interactions most relevant to the FTC's analysis — occur within the North American market.
Market Size and Share Analysis. The White Paper presented detailed market size and share analyses, summarized as follows:
As the table illustrates, the combined entity's share of the North American analytics segment would be approximately 17.74%, a level that is well below the thresholds that have historically prompted enforcement action in technology markets and that is consistent with a competitive market characterized by numerous credible rivals.
Competitive Landscape. The White Paper identified a robust competitive landscape with multiple significant competitors, including:
• Marlowe Asset Management Analytics Corp. — approximately 16% share of the North American analytics segment, offering a comprehensive cloud-based analytics suite with strong penetration among large asset managers and pension funds;
• Arclight Data Systems — approximately 14% share, providing multi-asset class risk and analytics solutions with a particular strength in fixed income and derivatives analytics;
• At least 12 additional competitors — each holding greater than 1% share of the North American analytics segment, including established enterprise software providers, specialized fintech firms, and emerging cloud-native platforms.
The White Paper demonstrated that the post-merger entity would operate in a highly competitive environment, with at least two competitors of comparable or greater scale and numerous smaller but innovative competitors exerting meaningful competitive pressure across all dimensions of competition, including price, product quality, innovation, and customer service.
Absence of Vertical Foreclosure Concern. The White Paper devoted substantial attention to the FTC's vertical foreclosure theory, demonstrating that neither the technical architecture nor the economic incentives of the combined entity would support a foreclosure strategy. Key points included:
• Pinnacle and Meridian both employ open-architecture APIs that are designed to interoperate with a wide range of third-party platforms. As of the date of the submission, Pinnacle's analytics platform maintained active integrations with at least 9 competing OMS and EMS platforms, and Meridian's OMS/EMS maintained active integrations with at least 7 competing analytics providers.
• The combined entity would have no technical ability to foreclose competing platforms, as the open-architecture design is embedded in the parties' existing customer contracts and is a core element of their respective value propositions to institutional investors, who uniformly demand interoperability and multi-vendor flexibility.
• The combined entity would have no economic incentive to foreclose competing platforms, as doing so would risk alienating existing customers who rely on multi-vendor technology stacks and would reduce the overall attractiveness of the combined platform to prospective customers.
These arguments were supported by quantitative analyses prepared by Dr. Chakrabarti, including a vertical arithmetic model demonstrating that the profit loss from customer defection resulting from a foreclosure strategy would substantially exceed any profit gain from increased market share in the foreclosed segment.
C. Advocacy Presentation (December 7, 2023) and Senior Staff Briefing (December 19, 2023)
On December 7, 2023, Howard Bellamy, Monica Reyes, and Dr. Arvind Chakrabarti delivered a formal advocacy presentation to the FTC Bureau of Competition, Mergers IV Division staff. The presentation was structured around the following key themes:
(1) The competitive landscape for cloud-based analytics and portfolio management software is broad, dynamic, and highly competitive, with numerous well-resourced competitors and low barriers to innovation;
(2) The combined entity's market share, even under the narrowest plausible market definition, would remain moderate and would not confer market power;
(3) The horizontal overlap between Pinnacle and Meridian in analytics functionality is limited, as Pinnacle's core strength lies in portfolio construction, risk modeling, and ESG scoring, while Meridian's analytics module is primarily a reporting and attribution tool ancillary to its core OMS/EMS functionality;
(4) The vertical foreclosure theory is unsupported by the technical architecture, customer contract terms, or economic incentives of the combined entity;
(5) The transaction is expected to generate substantial procompetitive efficiencies through the creation of an integrated front-to-back-office technology platform that would enhance product quality, accelerate innovation, and deliver cost savings to institutional investors; and
(6) Customer feedback collected by the FTC during the investigation was broadly supportive of the transaction and reflected no material concerns regarding competitive harm.
On December 19, 2023, a Senior Staff briefing was conducted at the FTC, attended by senior officials within the Bureau of Competition. The briefing reinforced the key arguments advanced during the December 7 presentation and addressed certain follow-up questions raised by the Staff during the intervening period.
Following the Senior Staff briefing, the FTC ultimately determined not to challenge the transaction. The waiting period expired on January 19, 2024, and the matter was closed without the imposition of any conditions.
VI. SATISFACTION OF ANTITRUST CONDITION UNDER THE MERGER AGREEMENT
The Merger Agreement contains, at Section 7.1(b), a condition to closing requiring the expiration or termination of all applicable waiting periods under the HSR Act (including any extended waiting period resulting from a Second Request) without the imposition of any injunction, order, judgment, decree, or other governmental action prohibiting, restraining, or otherwise preventing the consummation of the transactions contemplated by the Merger Agreement.
With the waiting period expiring on January 19, 2024, without the FTC taking any enforcement action or seeking to block the transaction, this condition is now fully and unconditionally satisfied. Specifically:
• The HSR Act waiting period has expired in full;
• No injunction, temporary restraining order, or other judicial or administrative order has been entered prohibiting or restraining the consummation of the transaction;
• No consent decree has been entered;
• No hold-separate order has been imposed;
• No divestiture, licensing, or other structural remedy has been required;
• No behavioral commitment, monitoring obligation, or other condition has been imposed; and
• No ongoing investigation or enforcement proceeding remains pending before the FTC or the DOJ with respect to the transaction.
We also note that the Outside Date under the Merger Agreement is April 14, 2024, which is 12 months from the date of signing. The Merger Agreement further provides for an automatic three-month extension of the Outside Date to July 14, 2024, in the event that the antitrust condition is the sole remaining unsatisfied closing condition as of the initial Outside Date. Given that FTC clearance has been obtained as of January 19, 2024, well in advance of the Outside Date, this extension provision is now moot, and the parties have ample time to complete the remaining closing deliverables and consummate the transaction.
VII. ENGAGEMENT COST SUMMARY
The following is a summary of the total Solara-side costs incurred in connection with the Second Request compliance process, from the commencement of the Calderwood & Harkness engagement on May 30, 2023 through FTC clearance on January 19, 2024.
A. Calderwood & Harkness LLP Legal Fees
Estimated total Calderwood & Harkness legal fees through clearance: $5,740,000
The Calderwood & Harkness team members and their applicable billing rates were as follows:
The legal fees include all time and charges incurred for Second Request compliance strategy and management, custodian interviews and coordination, document review supervision and quality control, privilege log preparation and defense, structured data submission preparation, economic analysis and White Paper drafting, advocacy preparation and presentation, FTC Staff communications and negotiations, and related advisory services.
B. Keymark Document Solutions LLC Vendor Costs
Estimated total Keymark vendor costs: $1,820,000
Keymark's charges encompassed document processing, de-duplication, hosting in the Crestline Technologies platform, the staffing and management of the 22-person contract review attorney team, quality control workflows, privilege log assembly assistance, and production formatting. Daniel S. Fong of Keymark served as Project Manager for the engagement.
C. Total Solara-Side Second Request Compliance Cost
A final invoice covering all remaining fees and costs will follow separately under cover of a matter closing letter. All fees and costs have been incurred pursuant to the engagement letter dated May 30, 2023, and the terms and conditions set forth therein.
We note that the costs summarized above reflect only the Solara-side compliance costs. Pinnacle-side compliance costs, which were managed by Hargrove, Pelletier & Stein LLP, are not included in this summary and are expected to be addressed separately between Pinnacle and its counsel.
VIII. NEXT STEPS FOR TRANSACTION CLOSING
With the antitrust condition now satisfied, the parties should move promptly to complete the remaining closing deliverables and consummate the transaction. The following items require attention in the near term.
A. Financing Arrangements
Solara should coordinate with Briarcliff National Bank, N.A. — Karen P. Aldridge, Relationship Manager — regarding the $825 million senior secured term loan facility that constitutes the debt financing component of the transaction. Specifically, Solara should confirm the satisfaction of all conditions precedent to drawdown under the credit agreement, including any required regulatory approvals, solvency certifications, officer's certificates, and the delivery of customary closing documents to the lender group. Calderwood & Harkness is available to assist with the review of any financing-related regulatory conditions, although we understand that Quelston & Harte LLP serves as Solara's primary financing counsel for this transaction.
B. Closing Mechanics
Calderwood & Harkness recommends that Solara promptly initiate the following closing mechanics:
(1) Coordination with Pinnacle / Sellers' Counsel. Coordinate with Hargrove, Pelletier & Stein LLP (Catherine A. Pelletier, Lead Partner) and Ashford Crane LLP (Robert T. Ishikawa, counsel to Thorngate Capital Partners LP as Sellers' Representative) on the satisfaction of all remaining closing conditions under the Merger Agreement, including the bring-down of representations and warranties, the absence of a material adverse effect, the delivery of required officer's certificates and legal opinions, and the satisfaction of any third-party consent requirements.
(2) Non-Antitrust Conditions Precedent. Confirm that all non-antitrust conditions precedent to closing, including conditions relating to the accuracy of representations and warranties, the absence of a material adverse effect, the completion of required corporate approvals, and the receipt of all necessary third-party consents (including any key customer or vendor consents required by the Merger Agreement), remain satisfied or are reasonably expected to be satisfied as of the anticipated closing date.
(3) Rollover Equity Documentation. Finalize the rollover equity documentation governing the approximately $440 million in rollover equity contributions from Pinnacle management and existing investors, including the rollover subscription agreements, management equity plan documents, and any related stockholders' agreement or limited partnership agreement amendments for the post-closing holding structure.
(4) Financial Advisor Coordination. Coordinate with Redstone Advisory Group LLC (Elaine C. Davenport, Managing Director), financial advisor to Solara, on the preparation and execution of the closing funds flow memorandum, including the allocation of cash consideration among the Sellers, the funding of any escrow or holdback amounts, and the disbursement of transaction-related expenses.
(5) Closing Financial Deliverables. Coordinate with Fielding & Cascade Insurance Brokers (Thomas R. Sennett, Engagement Partner) regarding the preparation and delivery of any required closing balance sheet, working capital calculations, or other financial deliverables for Pinnacle as specified in the Merger Agreement.
C. Data Retention and Privilege Protection
Calderwood & Harkness will retain all matter files generated in connection with the Second Request engagement, including but not limited to privilege logs, work product memoranda, advocacy materials, internal analyses, correspondence with the FTC, and all related documentation. These files will be maintained in accordance with Calderwood & Harkness's document retention policy and will remain available to Solara upon request, subject to applicable privilege and confidentiality protections.
All materials produced to the FTC during the investigation remain subject to the terms of the FTC's Model Stipulated Protective Order and the Clawback / Non-Waiver Agreement executed on June 9, 2023. Solara and its affiliates should be mindful of these continuing obligations when handling any copies of produced materials retained in their own files.
We recommend that Solara and Meridian implement formal litigation hold release procedures for the 18 Solara-side custodians whose documents were collected in connection with the Second Request. Prior to releasing any litigation hold, Solara should confirm with its internal legal team and other outside counsel that no other pending or reasonably anticipated litigation, regulatory investigation, or governmental inquiry requires the continued preservation of any of the materials subject to the current hold. Calderwood & Harkness is available to consult on the scope and timing of any hold release.
D. Post-Closing HSR Considerations
No ongoing reporting, monitoring, or compliance obligations were imposed by the FTC as a condition of clearance. Accordingly, there are no post-closing antitrust obligations arising from the Second Request investigation itself.
However, the parties should ensure that standard HSR Act post-closing administrative obligations are addressed as part of the closing checklist. These obligations include the notification to the FTC and the DOJ of the consummation of the transaction, which is customarily provided within a reasonable period following closing. Calderwood & Harkness will prepare and submit this notification on Solara's behalf as part of our closing assistance.
IX. CONCLUSION
The FTC Second Request investigation arising from the proposed acquisition of Pinnacle Cloud Systems, Inc. by Solara Digital Infrastructure Fund IV LP concluded successfully with FTC clearance on January 19, 2024, after a total investigative timeline of 235 calendar days from the issuance of the Second Request on May 29, 2023. No enforcement action was initiated, no consent decree or remedial order was entered, and no divestiture, behavioral commitment, or other condition was imposed.
The antitrust condition to closing under Section 7.1(b) of the Merger Agreement is fully and unconditionally satisfied, and the transaction may proceed to closing within the timeframe contemplated by the Merger Agreement, well in advance of the Outside Date.
We believe this result reflects the strength of the competitive merits of the transaction, the thoroughness of the compliance effort, and the effectiveness of the advocacy strategy pursued throughout the investigation. Calderwood & Harkness is proud to have represented Solara in this matter and remains available to assist with any residual antitrust matters, closing-related issues, or other needs that may arise as the transaction proceeds to consummation.
Should you have any questions regarding this memorandum or any aspect of the Second Request process, please do not hesitate to contact us at your convenience.
Howard Bellamy, Direct: (202) 555-7412 | hbellamy@calderwoodharkness.com
Monica Reyes, Direct: (202) 555-7438 | mreyes@calderwoodharkness.com
Calderwood & Harkness LLP 1900 K Street NW, Suite 800 Washington, DC 20006 Main: (202) 555-7400
Respectfully submitted,
CALDERWOOD & HARKNESS LLP
By: ________
Howard Bellamy Partner, Antitrust & Competition Group
By: ________
Monica Reyes Senior Associate, Antitrust & Competition Group
ENCLOSURES / ATTACHMENTS
No enclosures are attached to this memorandum. For reference purposes, the following documents were generated in connection with the engagement and are maintained in Calderwood & Harkness's matter files:
1. Engagement Letter, dated May 30, 2023, between Calderwood & Harkness LLP and Solara Digital Infrastructure GP LLC;
2. Substantial Compliance Certification and Accompanying Letter, dated September 22, 2023, filed with the FTC on behalf of Solara Digital Infrastructure Fund IV LP;
3. Economic Submission / White Paper, dated November 3, 2023, authored by Dr. Arvind Chakrabarti, with legal framing by Howard Bellamy and Monica Reyes;
4. Response to FTC First Privilege Challenge, dated November 15, 2023;
5. Response to FTC Second Privilege Challenge, dated December 2023; and
6. Advocacy Presentation Deck, dated December 7, 2023.
Copies of these materials are available upon request from Calderwood & Harkness.
DISTRIBUTION
DISTRIBUTION LIMITED. This memorandum is addressed exclusively to Graham A. Whitfield, Founding Partner & CEO, and Sandra K. Levinson, Co-Managing Partner & CIO, of Solara Digital Infrastructure GP LLC. This memorandum constitutes a privileged and confidential attorney-client communication and is not to be distributed, forwarded, copied, or disclosed to any other person or entity without the prior written approval of Calderwood & Harkness LLP. Any unauthorized disclosure may result in the waiver of attorney-client privilege and/or work product protection.
Date | Event
April 14, 2023 | Merger Agreement executed by and among Solara Digital Infrastructure Fund IV LP, PCS Acquisition Corp., Pinnacle Cloud Systems, Inc., Thorngate Capital Partners LP (as Sellers' Representative), and the Sellers named therein.
April 28, 2023 | HSR Act premerger notification filings submitted by both parties to the FTC and DOJ. Filing fee of $450,000 paid by Solara.
May 28, 2023 | Original expiration date of the initial 30-day waiting period; extended by one day to May 29, 2023 by mutual agreement with FTC Staff.
May 29, 2023 | FTC Second Request issued by Bureau of Competition, Mergers IV Division (FTC File No. 231-0487), containing 47 specifications.
May 30, 2023 | Calderwood & Harkness LLP engagement letter executed; formal engagement of Calderwood & Harkness to manage all aspects of Second Request compliance, advocacy, and related matters.
Date | Event
June 2, 2023 | Compliance strategy memorandum delivered to Solara management, outlining the anticipated scope, timeline, budget, and key decision points for the Second Request response.
June 7, 2023 | Custodian identification and collection protocol finalized. A total of 18 Solara-side custodians were identified: 12 from the Solara GP/Fund IV management and investment team, and 6 from Meridian management, including Meridian CEO Priya N. Raghavan. Custodian interviews commenced immediately thereafter.
June 9, 2023 | Clawback / Non-Waiver Agreement executed with FTC Staff, governing the treatment of any inadvertent production of privileged materials. The agreement was drafted to incorporate the principles set forth in Federal Rule of Evidence 502(d) and the terms of the FTC's Model Stipulated Protective Order, providing robust protection against any claim of privilege waiver arising from inadvertent disclosure during the production process.
June 15, 2023 | Privilege review protocol and detailed review guidelines disseminated to the 22-person contract review team managed by Keymark Document Solutions LLC ("Keymark"). Daniel S. Fong of Keymark served as Project Manager for the document review. The review was conducted using a hosted Crestline Technologies platform, with customized coding panels, privilege tagging protocols, and quality control workflows designed to ensure accuracy and consistency across the large review population.
June – September 2023 | Document collection, processing, first-level and second-level review, and production to the FTC. Approximately 1.24 million documents were collected from Solara-side custodians and non-custodial sources. After de-duplication, date filtering, file-type exclusion, and removal of system-generated files, approximately 487,000 documents were submitted for human review for responsiveness, privilege, and confidentiality designations.
Date | Event
September 22, 2023 | Solara Substantial Compliance Certification filed with the FTC, 116 days after the issuance of the Second Request. The certification covered the production of approximately 196,300 documents (Bates range SDILP-2R-000001 through SDILP-2R-196300), 7 structured data submissions, and a comprehensive privilege log containing 4,872 entries.
October 6, 2023 | Pinnacle Substantial Compliance Certification filed by Hargrove, Pelletier & Stein LLP, counsel to Pinnacle and the Sellers. Catherine A. Pelletier served as Lead Partner on the Pinnacle-side engagement, assisted by David L. Morrissette, Associate.
October 27, 2023 | FTC Staff issued 8 supplemental document requests (commonly referred to as "pull-forward requests"), seeking updated documents and data for periods subsequent to the original collection date range specified in the Second Request.
November 3, 2023 | Economic Submission / White Paper filed with FTC Staff. The submission was authored by Dr. Arvind Chakrabarti, Senior Economist in Calderwood & Harkness's Economic Consulting group, with legal framing and strategic direction provided by Howard Bellamy and Monica Reyes. The White Paper addressed market definition, market share analysis, competitive effects, and the absence of vertical foreclosure concerns, as discussed in detail in Section V below.
November 8, 2023 | FTC Staff issued its first privilege challenge, challenging 214 of the 4,872 entries on the Solara privilege log. The challenges primarily focused on the adequacy of privilege descriptions and assertions of common interest privilege.
November 15, 2023 | Calderwood & Harkness filed a comprehensive response to the first privilege challenge, providing enhanced descriptions for all 214 challenged entries. All 214 entries were sustained without the production of any underlying document.
November 17, 2023 | Supplemental production completed in response to the 8 pull-forward requests issued on October 27, 2023. Additional custodial searches were conducted, and supplemental data submissions were included as applicable to bring all structured data current through the most recent available reporting period.
Date | Event
December 1, 2023 | FTC Staff issued its second privilege challenge, challenging an additional 47 entries on the Solara privilege log.
December 7, 2023 | Formal advocacy presentation delivered to FTC Bureau of Competition, Mergers IV Division staff by Howard Bellamy, Monica Reyes, and Dr. Arvind Chakrabarti. The presentation addressed the FTC's two identified areas of competitive concern — horizontal overlap in cloud-based analytics and potential vertical foreclosure — and presented detailed economic evidence and legal argument demonstrating the absence of competitive harm.
December 19, 2023 | Senior Staff briefing conducted at the FTC. The briefing was attended by senior officials within the Bureau of Competition and reinforced the key arguments advanced during the December 7 advocacy presentation.
January 19, 2024 | FTC clearance obtained. The waiting period expired without the FTC taking any enforcement action or seeking to block the transaction. The matter was closed, and no consent decree, hold-separate order, divestiture, behavioral remedy, or any other condition was imposed.
Metric | Volume
Total documents collected (Solara side) | ~1,240,000
Documents reviewed after de-duplication and filtering | ~487,000
Documents produced to FTC | ~196,300
Bates range | SDILP-2R-000001 through SDILP-2R-196300
Solara-side custodians | 18 (12 Solara GP/Fund IV; 6 Meridian)
Pinnacle-side custodians (managed by Hargrove, Pelletier & Stein LLP) | 14
Privilege Basis | Number of Entries | Percentage
Attorney-client privilege | 3,641 | 74.8%
Work product doctrine | 894 | 18.4%
Joint defense / common interest privilege | 337 | 6.8%
Total | 4,872 | 100.0%
Metric | Value
Global Total Addressable Market (TAM) | $11.8 billion
North American TAM | $6.2 billion
North American Analytics Segment TAM | $1.84 billion
Pinnacle analytics revenue (74.68% of $387M total revenue) | $289 million
Pinnacle standalone analytics share (NA analytics segment) | ~12.4%
Meridian analytics module revenue (17.64% of $212M total revenue) | $37.4 million
Meridian standalone analytics share (NA analytics segment) | ~5.2%
Combined analytics revenue | $326.4 million
Combined analytics share (NA analytics segment) | ~17.74%
Professional | Role | Billing Rate
Howard Bellamy | Partner, Antitrust & Competition Group | $1,650/hr
Monica Reyes | Senior Associate (Year 7), Antitrust & Competition Group | $1,050/hr
Elliot Nguyen | Associate (Year 4), Antitrust & Competition Group | $825/hr
Tamara J. Westbrook | Of Counsel, E-discovery & Information Governance | $975/hr
Dr. Arvind Chakrabarti | Senior Economist, Economic Consulting | $1,200/hr
Cost Category | Amount
Calderwood & Harkness LLP legal fees | $5,740,000
Keymark Document Solutions LLC vendor costs | $1,820,000
Total | $7,560,000