Competition Corner

In the latest step in the U.S. antitrust agencies’ heightened enforcement against private equity, the Federal Trade Commission held a Workshop on Private Equity in Health Care yesterday with the U.S. Department of Justice and Department of Health and Human Services.

In analyzing a government contractor target for a proposed acquisition—such as a merger, asset sale, or stock purchase—due diligence may uncover a seller’s noncompliance with certain Federal Acquisition Regulations or other applicable regulations.

The Federal Trade Commission’s (FTC) continued scrutiny of private equity “roll-up” strategies resurfaced in a recent complaint filed in Texas federal court alleging that the private equity firm Welsh, Carson, Anderson & Stowe (Welsh Carson) and its portfolio company U.S. Anesthesia Partners, Inc. (USAP) entered into a “multi-year anticompetitive scheme to consolidate anesthesiology practices in Texas, drive up the price of anesthesia services provided to Texas patients, and boost their own profits.” 

The Antitrust Division of the United States Department of Justice (DOJ) announced that seven directors resigned from corporate board positions in response to the DOJ’s concerns that their roles violated Section 8 of the Clayton Act’s prohibition on interlocking directorates. The resignations follow the DOJ’s correspondence in late September to a number of public companies, in which it raised concerns based on statements in public filings that existing officers or directors of the company were serving as officers or directors of another company that may be considered a competitor.