• Vertical Transactions. The 2023 Merger Guidelines deem vertical integration presumptively illegal if one party holds a share of 50% or more in its market. We expect this presumption to be eliminated. • Eliminating Focus on Serial Acquisitions. The 2023 Merger Guidelines single out serial acquisitions, or “roll- up” strategies, as a competition issue and seek to analyze roll-up strategies in the aggregate rather than just examining the transaction under review. We expect the new administration will return to the traditional approach of evaluating each transaction based on its individual merits.
No Love for Big Tech
Despite an anticipated shift toward a more deal-friendly environment for PE transactions, technology deals—particularly those involving big tech—are unlikely to see any relief. Slater in particular has been a critic of big tech and is expected to continue the agencies’ strong focus on scrutinizing technology companies, including healthcare technology firms.
Expanded Hart-Scott-Rodino Form Likely to Remain
The FTC recently approved substantial updates to the Hart-Scott-Rodino (HSR) premerger notification form in a unanimous (5-0) vote, with support from incoming FTC Chair Ferguson. These changes, set to take effect on February 10, 2025, will significantly increase the preparation time and expense for PE firms pursuing notifiable transactions. Although it is unlikely that the new administration will rescind the new HSR requirements, it is possible they may delay the implementation of the new form to accommodate a potential short-term regulatory freeze that could be requested by the Trump administration. Although we expect the new form to go into effect, it is likely that the new administration will issue informal guidance aimed at reducing some of the burden associated with the new rules.
Key Takeaways
PE firms operating in the healthcare space can anticipate a more predictable and deal-conducive antitrust environment in 2025, with the potential exception of deals involving healthcare technology. Nevertheless, the implementation of the new HSR form early next year will likely increase deal costs and extend deal timelines even as the risks of deals facing lengthy antitrust investigations decrease. 8. Traversing the OIG’s Compliance Program Guidance Updates BY TRAVIS LLOYD & ANNA GRIZZLE Recent and forthcoming compliance program guidance from the HHS Office of Inspector General (OIG) demands careful attention from PE investors. When conducting diligence to determine whether to make an investment, PE investors should evaluate the effectiveness of a target’s compliance program under recent guidance. The evaluation will assist PE investors in assessing if the target company is taking appropriate steps to ensure compliance with applicable regulations and mitigate risks associated with potential non-compliance. OIG has, since 1998, issued voluntary compliance program guidance documents directed at various segments of the healthcare industry. In connection with its effort to modernize and improve its publicly available resources, OIG issued General Compliance Program Guidance (GCPG) in late 2023. The GCPG broadly addresses key federal authorities for entities engaged in healthcare business, the seven elements of a compliance program, adaptations for small and large entities, and other compliance considerations. OIG published its first industry segment-specific compliance program guidance (ICPG) in late 2024. The Nursing Facility ICPG describes risk areas for nursing facilities, recommendations and practical considerations for mitigating those risks, and other important information OIG believes nursing facilities should consider when implementing, evaluating,
6 | BASS, BERRY & SIMS
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