Holly Buckley
speaker
187 appearances
9 recordings
1 series
first heard Jan 2025
last heard Jun 2025
Holly Buckley’s voice in public audio — every appearance, attributed to the second.
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Hey, Scott, and thanks as always for having me on. A couple of things I think are super interesting that are either impacting deals or just interesting trends. The first is the much anticipated new HSR rule is actually live and went into effect on February 10th. So this new rule is projected to lead to a substantial increase in the time and effort required to complete an HSR filing.
So that's for those deals that are over the HSR threshold. And I'll apply unless the Congress or the FTC revises or revokes the rule. And there's also a lawsuit currently challenging the rule. But for now, we're up and running with the new rule. Few things to consider with the new rule.
One, the burden of production is much higher and the types of information that need to be produced are much greater. And so it's really important to get training for your deal teams and investment bankers because certain types of information that wouldn't have been previously disclosable now are, such as anything that's gone to the board related to the deal.
And so it's just really important that those drafts are all very carefully put together and You're not just relying on the final versions. And it's really important to bring HSR Counsel in much earlier to avoid delays because it's no longer going to be something you can likely complete in five to seven days. So we've been kind of waiting for this one, wondering if it's going to get pulled back.
But for now, it is actually live again.
Yeah. So, I mean, anything that's below the threshold, which it's not just a straight enterprise value threshold, it's a complex equation to kind of get there, but around $120 million, if you're under that point, based on the calculations, you don't need to do an HSR filing. So that hasn't really changed.
The bigger change is around the type of information that's going to be produced and where it's going to get more complicated, where The corporate structure is more complicated, but also to your point, Scott, where there is more overlap on geographic area and overlapping products and services or overlap on suppliers, that's where the burden is greater and it's going to be more complicated.
So I guess an easy way to think about it is for the transactions that generally would have more of an antitrust impact, whether real or potential. Those are the deals that are going to have a much larger review, much larger production, and probably longer timeframes and more likely second requests.
For the transactions where it's party A buying party B and party A is not currently in the line of business and doesn't have overlap, I think there's not going to be an awful lot of change, although the initial disclosure will be greater. So I think for those deals that do implicate antitrust laws, you can expect a longer, more painful ride.
Yeah, so last year, one of the big state laws that everyone was very focused on was the California Senate Bill 3129, which would have, if it had gone through in certain of the forms that it was proposed, would have almost prohibited kind of MSOPC, kind of the private equity investment in medical and dental businesses. And Newsom ended up vetoing that law.
It got all the way to his desk and then he didn't sign it and said, look, we already have a process for this. We're not going to kind of go this far and sign this. But now there's a new California bill that's proposed, which is Senate Bill 351. This came out in the last week or so. This is very, very watered down compared to what was proposed last year. And it's much more of a
corporate practice bill than it is an antitrust bill or a real kind of transaction bill. But essentially, it prohibits PE funds and hedge funds from interfering with a professional judgment of physicians or dentists in making healthcare decisions and exercising power over specified actions, including decisions on billing and coding and patient care services.
So in a way, this bill is somewhat of a nothing burger in its current form in that Those prohibitions are already live in the, as far as the medical board goes, and this would just be giving the Attorney General power over it. And so we don't consider this to be a big deal, but it's interesting that California after kind of failing last year to get their law passed, is kind of back again.
We'll see if this evolves, if it gets modified, if it gets more prongs to it, and if it ends up creeping back towards 31-29. But really just interesting that California is back for another bite at the apple after the failing last year. And that goes with a number of other states, as we've talked about in other podcasts that are coming out with their
AG laws to have pre-transaction filing notices and disclosure requirements, and just a lot of activity at the state level that's implicating transactions and creating a whole other level of work and time for investors.
Yeah, I mean, I think it, in a way, just kind of creates something else to fight about, right? So I think you're right in general. PE funds are not looking to get in the middle of professional judgment.
There's very few private equity professionals that hold medical degrees, and they're really looking to streamline the back end and to use capital for growth and improvement, but it creates something else that can be used as a sword or a shield.
And I don't necessarily think this is going to be super impactful, but I think it will continue to create a disincentive for some folks to invest in California as it continues to be a very difficult state.
The final thing I was going to flag is what I think is just a super interesting trend. And it goes with the theme of funds looking, healthcare funds looking at things to invest in that aren't direct reimbursement, direct provider services companies.
And it's not that funds are not making those investments, but we're seeing a big trend toward diversification to invest in things in the healthcare orbit, because it's still just a very dynamic with a lot of potential and a lot of room for improvement. But one of the areas that I think is super interesting is funds investing in healthcare consulting companies.
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