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HSR Valuation Toolkit
Practical Law Toolkit 1-560-4928 (Approx. 8 pages)
A Toolkit that includes resources to help counsel value transactions to determine whether premerger notification is required under the Hart-Scott-Rodino (HSR) Act and if so, the value of the HSR filing fee. This Toolkit helps counsel determine the HSR size-of-transaction, including by applying exemptions and determining the value of contingent payments.
The Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) requires that parties to certain transactions make premerger notification filings to the Federal Trade Commission (FTC) and the Antitrust Division of the Department of Justice (DOJ) before the transaction can close, including acquisitions of:
- Voting securities.
- Assets.
- Controlling interests in non-corporate entities, such as partnerships or limited liability companies (LLCs) (see Practice Note, Determining Hart-Scott-Rodino Applicability: Determining the Ultimate Parent Entity).
These types of transactions are reportable if no exemptions apply and the HSR size-of-transaction is:
- Above $478 million.
- Above $119.5 million and no more than $478 million and the size-of-person test is met (see Practice Note, Determining Hart-Scott-Rodino Applicability: The Size-of-Person Threshold).
The size-of-transaction includes the consideration being paid in the current acquisition as well as the value of equity and certain assets already held by the buyer that were acquired from the same seller. Counsel must accurately calculate the HSR size-of-transaction to determine if the transacting parties must make an HSR filing. Parties that do not submit HSR forms in transactions required to be reported under the HSR Act may be subject to:
- An antitrust enforcement action.
- Civil penalties of up to $51,744 per day for each day of noncompliance (15 U.S.C. § 18a(g)(1) and 89 Fed. Reg. 1445 (Jan. 10, 2024)).
In a reportable transaction, the size-of-transaction determines the amount of the filing fee. The HSR filing fee is graduated depending on the transaction value (see Practice Note, Hart-Scott-Rodino Act: Overview: Filing Requirements and see Annual Antitrust HSR Filing Fee Adjustments Chart).
This Toolkit is a collection of continuously maintained resources designed to guide counsel through the HSR valuation process to determine whether a transaction is reportable under the HSR Act and if so, the value included on the HSR form and of any filing fee paid.
For more information on the HSR Act, see Practice Note, Hart-Scott-Rodino Act: Overview. For guidance through the HSR process, see Hart-Scott-Rodino Act Toolkit. For a standard, customizable version of the HSR form that is also found in Contract Express, see Standard Document, Hart-Scott-Rodino (HSR) Form.