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Thompson Hine LLP, a full-service business law firm with approximately 400 lawyers in 8 offices, was ranked number 1 in the category “Most innovative North American law firms: New working models” by The Financial Times and was 1 of 7 firms shortlisted for The American Lawyer’s inaugural Legal Services Innovation Award. The firm has been recognized by the National Law Journal as a Legal Technology Trailblazer and featured by Bloomberg for its innovative service delivery models, which drive accuracy and predictability. The firm’s commitment to innovation is embodied in Thompson Hine SmartPaTHTM – a smarter way to work – predictable, efficient and aligned with client goals. For more information, please visit ThompsonHine.com and ThompsonHine.com/SmartPaTH.

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On May 23, the FTC <a href="https://www.ftc.gov/news-events/news/press-releases/2024/05/ftc-doj-seek-info-serial-acquisitions-roll-strategies-across-us-economy" target="_blank" rel="noreferrer noopener">announced</a> a <a href="https://www.ftc.gov/system/files/ftc_gov/pdf/Serial%20Acquisition%20RFI_5.22.24.pdf" target="_blank" rel="noreferrer noopener">joint inquiry</a> with the DOJ concerning serial acquisitions by private equity firms. The antitrust agencies have been promising more scrutiny on private equity “roll-ups,” and so far they have focused almost exclusively on markets related to health care (e.g., physician practices). This announcement reflects a broader inquiry and specific request for information from the public, and it is difficult to tell where the agencies will take it (or where it will take them). The inquiry is not limited to any particular industry, but the press release specifically identifies “housing, defense, cybersecurity, distribution businesses, agriculture, construction, aftermarket/repair, and professional services markets.”

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This inquiry is consistent with the agencies’ recent condemnations of certain private equity practices, including specific language in the <a href="https://www.ftc.gov/system/files/ftc_gov/pdf/2023_merger_guidelines_final_12.18.2023.pdf" target="_blank" rel="noreferrer noopener">new Merger Guidelines</a>, which states that “an anticompetitive pattern or strategy of multiple acquisitions in the same or related business lines may violate” the antitrust laws and in a <a href="https://www.ftc.gov/system/files/ftc_gov/pdf/p221202sec5enforcementpolicystatement_002.pdf" target="_blank" rel="noreferrer noopener">formal policy statement</a> issued by the FTC in 2022 asserting that a series of multiple acquisitions or minority investments could be unlawful if, taken together, they substantially lessen competition, even if none violated the antitrust laws individually. The agencies also have brought <a href="https://www.justice.gov/opa/pr/justice-department-s-ongoing-section-8-enforcement-prevents-more-potentially-illegal" target="_blank" rel="noreferrer noopener">enforcement actions for board interlocks</a> involving different individuals, both affiliated with the same private equity firm, sitting on the boards of competing portfolio companies.

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Private equity firms should be aware of this current regulatory/enforcement effort and consider the potential antitrust risk associated with their acquisition strategies, particularly if they believe any customers, businesses, local governments, consumers, or advocacy groups may complain in response to this inquiry.

<em>This advisory bulletin may be reproduced, in whole or in part, with the prior permission of Thompson Hine LLP and acknowledgment of its source and copyright. This publication is intended to inform clients about legal matters of current interest. It is not intended as legal advice. Readers should not act upon the information contained in it without professional counsel.</em>

<em>This document may be considered attorney advertising in some jurisdictions.</em>

https://admin.thompsonhine.com/wp-content/uploads/2024/05/Antitrust-Law-Update-FTC-and-DOJ-Launch-Inquiry-Regarding-Serial-Acquisitions-and-Roll-Up-Strategies.pdf

FTC and DOJ Launch Inquiry Regarding Serial Acquisitions and Roll-Up Strategies

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