Transcript of ‘Hot Documents’ Conference Call with Mike Cowie and Rani Habash

Dec 07, 2021

On November 17, The Capitol Forum hosted a conference call with Dechert antitrust partners Mike Cowie and Rani Habash to discuss the Boiling Points Collection and Counseling Program that Dechert recently introduced, as well as the role hot documents have played in prior—and are expected to play in future—agency merger reviews. The full transcript, which has been modified slightly for accuracy, can be found below.

MR. NATE SODERSTROM: Good morning, everyone. And thank you for joining The Capitol Forum’s conference call on “Hot Documents in Agency Merger Reviews.” I’m Nate Soderstrom, senior editor at The Capitol Forum. And I’m joined today by my colleague Jeff Bliss who is also a senior editor at The Capitol Forum. And we, in turn, are joined by Mike Cowie and Rani Habash who are partners at Dechert LLP.

Mike is Co-Chair of Dechert’s antitrust group in D.C., and formally held leadership positions at the Federal Trade Commission. Rani is also a partner at Dechert in D.C. and was named by National Law Journal as a rising star in antitrust. Mike and Rani worked together on several of the largest, most heavily investigated, deals in history, including CVS Health’s acquisition of Aetna and Express Scripts’ purchase of Medco.

A quick note before we get underway. To begin the call, Mike and Rani are going to kick us off with a presentation based off the Boiling Points Collection and Counseling Program that Dechert recently introduced.

After the presentation, Jeff and I are going to ask Mike and Rani some questions. We are also, however, happy to entertain questions from the audience. If you do have questions for Mike and Rani, please email them to Again, that’s And capitol is spelled with an “O”. Thanks again for joining us. And with that, I will kick it over to Mike and Rani, who are going to start us off with a presentation.

MR. MIKE COWIE: Thanks, Nate. We appreciate the invite. This is Mike. So, for years, I’ve been collecting actual hot documents used by the government in antitrust non-merger challenges. So these are publicly available, and we’ve pulled these from FTC, Justice Department, State AG complaints, from consent order filings, from merger litigation briefs, from opening arguments or closing arguments slides. You see some of these from court decisions as well.

And what we’ve done is we’ve built out a comprehensive collection of these hot documents. And as Nate mentioned, it’s branded as Boiling Points. No one else has produced anything like this. And you’ll see the second slide we shared, you’ll see we have a user friendly, well-organized, table of contents. And that’s organized by key issues in the M&A process, how you describe the seller, the deal rationale, synergies, financial pricing analysis.

So we’ve used these types of real world hot documents from merger cases and counseling. We use this with investment bankers. We work with management consultants like McKinsey or BCG that are doing synergy analysis. We use it with internal business development, personnel from our clients and senior management that are part of the deal team.

Now, this is also a useful tool for case assessment. So when we evaluate a potential deal before signing, what we often try to do is replicate what the Justice Department or FTC would do in a preliminary inquiry. So when I ran a merger shop, you would ask for strategic plans, marketing plans, bid data. So before the companies sign a deal, before they commit to make divestitures or reverse break fee, you see the types of documents you expect the FTC or DOJ to ask for, you see the type of statements that may be significant. So we use these types of real world illustrations in case assessments.

For this group, I think it’s also useful in evaluating the strength of government cases. We’ll use it during a second request process in deciding whether to commit to divestiture versus litigation. Do they have the types of documents that a judge will find persuasive? Or is it more a theoretical concern? And I think it’s also a tool when you see a public complaint filed, you want to see if they have these types of documents projecting high prices from the merger or other harm from the merger. Or is it more an anecdotal or theoretical case?

We tell companies that these documents matter a lot. So the very first thing companies do, the large M&As, is they make their Hart-Scott-Rodino filings. And as part of that filing, they have to pull senior management documents analyzing the competitive effects of the deal or the synergies of the deal. That’s the very first thing FTC and DOJ staff is going to look at. And I can recall when I ran a merger shop at the FTC, we were in a debate on whether to issue a second request on a deal. And we ended up doing so because of a single phrase, in a single bullet, in a single PowerPoint.

So it matters a lot. And it’s often the difference between a lengthy, second request investigation. It could be the difference in whether there’s a divestiture demand or litigation. Rani, you want to expand or amplify these points?

MR. RANI HABASH: Yeah. So these documents often go into the Hart-Scott-Rodino filing and the government looks at them to determine whether to issue a second request in the first instance.

And then in the second instance, during the investigation, they get used in depositions of executives of the parties. And then it ultimately is used by the agencies to determine whether it’s worth going to court. And if you’ve seen our Dechert Antitrust Merger Investigation Timing Tracker (DAMITT), a second request investigation, just to resolve that right now, the average is around 12 months on that.

So it just shows the importance of these documents if they’re going into the agency’s decision of whether to even have an investigation or not. And you’re talking about a delay for your deal of 12 months on average. And you’re talking about millions of dollars in costs and legal fees and everything associated with that investigation. And then another six to eight months of litigation as well if it gets to that stage. So you’re really talking about significant costs and significant time just because of some statements that perhaps could have been worded more carefully than they were.

All right. So if you open up the presentation, and to kick it off here, if you look at slide two, you can see our table of contents, which categorizes the different documents by sort of type and sort of terms that we often see. And the full presentation is available at So you can find the full thing there. We’ve just picked out a few select slides for today’s presentation.

Going to page three of the deck. So this will be our first illustration, and it’s one of the most colorful ones in our entire collection here. So this was a document from the Sabre/Farelogix complaint. This quote showed up on page four of that complaint. And it was a text message from one of the buyer’s senior vice presidents to another employee within the company. And he wrote that the seller had been a customer’s “Trojan horse to ‘F’ us…[customer’s] bill is going up big time. “

This was the senior VP being upset, I think, at a customer and basically threatening to raise prices on them after the merger went through. And so this is an example of the really sort of colorful document. The DOJ used it in their opening statement. They used it in their closing statement. They used it in their complaint. They got a lot of use out of this document.

And we have a lot of illustrations like this in the book. I think a lot of these have sort of common sense appeal to an audience, whether it’s a judge or the agencies. But there’s other language like 900 pound gorillas and tactical knife fighting between the merging parties. I mean, there’s a whole host of different language that people use that gets put front and center by the government, even though, in some cases, it may not necessarily be bad. It’s just how it gets interpreted, and there may be other context that helps explain sort of what was going on. But this document in particular was a tough one, I think, for the case.

All right. And then if you go to slide four, this was from the Visa/Plaid case recently. And again, this quote showed up on page four of the DOJ complaint in that case. And it was an actual

document. So if you look at this volcano that’s drawn on here, this was an actual document where the buyer’s vice president of corporate development was doing a little doodling. It looks like maybe during a meeting, taking some notes. And the buyer’s VP wrote that – or he called the seller “an island ‘volcano’ whose current capabilities are just ‘the tip above the water.’”

This was a document that raised issues about nascent competition from Plaid and whether they were going to grow and potentially harm Visa sort of in the long run. And these are the types of documents we frequently see coming out of these sorts of M&A due diligence processes where someone is taking notes about them. And we always ask ourselves what could they have said or what could they have written to say this in a way that maybe is better? So he could have written that the seller had unique capabilities that were going to be complementary to Visa’s business. Or he could have written that the seller has unique assets or that there are opportunities to grow in the future. And so this island volcano idea where they’re about to erupt and sort of take Visa’s business was much more problematic.

MR. MIKE COWIE: So the next slide is from the FTC’s Facebook complaint. And it’s a statement from Facebook’s CEO Mark Zuckerberg. So that’s another dynamic here is the government is going to attach more weight to senior management statements, and they should. So what we see in investigations is great scrutiny of the emails and text messages from senior level management and the board. And here they’re obviously scrubbing Mark Zuckerberg’s emails and text messages and the like.

So what we have here is a statement by the Facebook CEO before the Instagram acquisition. Let me just say, Rani and I are not acting for Facebook in this deal. We’re not acting for opponents of Facebook. So this is just some observations from the sideline. And what the Facebook CEO is saying about Instagram is he says they’re nascent. If they grow to a large scale, they could be very disruptive to us. And then he talks about maybe spending as much as a billion. It turned out they spent a billion to buy Instagram in, I think, it was 2012.

So how should you evaluate a statement like this? One observation is it’s not a very bad document, right? So take some other cases. Dechert acted for Whole Foods when it acquired Wild Oats. And we got brought in, in the fifth inning. And the Whole Foods CEO—and this is public—wrote, “let’s do this deal to avoid nasty price wars. We’ve got to do this deal to avoid nasty price wars.”

We have illustrations in our Boiling Points deck where there’s much worse language, right? We have to take out our only competitor. They’re eating our lunch. We have to prevent tactical knife fighting. So this statement used by the FTC in the Facebook complaint is you could see why the FTC is using it. It suggests that one of the motivations for the deal may have been to combine with a company that has a potential to be disruptive. But there is a bit of a crystal ball element to this.

They say if they quote to a large scale, not they are going to go to a large scale, not we expect them. They could be disruptive. Again, not they will likely be disruptive.

And we’re seeing statements like this being used in life science deals as well. We see the agencies more comfortable characterizing early stage companies as potential future competitors. It used to be they have to be near the finish line. And you want to have business plans saying they’re going to be knocking on the door tomorrow or six months from now. Here, in contrast, a centerpiece of this FTC complaint is a CEO statement that Instagram could be disruptive if they grow. Rani, do you want to move to the very recent DOJ book publishing case?

MR. RANI HABASH: Yeah, so if you move onto slide six here, this was a quote from the very recent U.S. versus Bertelsmann case. This is DOJ’s lawsuit to block a merger between book publishers. And one of the key documents the DOJ cites in that complaint was from the seller’s CEO, where the seller says, “I’m pretty sure that the Department of Justice wouldn’t allow Penguin Random House to buy us.” So obviously, you look at that statement, you can understand why DOJ put it into the complaint. But I think once you dissect it, I think really what’s going on here is the seller’s CEO is acknowledging that there’s antitrust risk to this deal. But it’s sort of circular logic for DOJ to include this in the complaint and say, oh, because the seller’s CEO said that we wouldn’t allow Penguin Random House to buy them, here we are blocking it. And therefore, the deal is anti-competitive. It’s sort of just circular reasoning for DOJ to say that, that just because the seller’s CEO was speculating about what DOJ might do and then they did that thing. Therefore, the deal is anti-competitive.

This comes up a lot because often in these deals, the corporate development folks or the bankers are negotiating the transaction. And one of the things that they’re often negotiating is the antitrust risk provisions. Whether it’s how big are any divestitures going to be? What’s the size of the reverse termination fee? What is the outside termination date to allow enough time for an investigation and potentially litigation?

And each side usually has its own antitrust counsel giving them advice on that. And that advice is privileged. But then what happens is often the clients, executives at some of these companies will go to the other side and negotiate and say, hey, we need stronger antitrust provisions. Or we need a bigger breakup fee. There’s a lot of antitrust risk here. And DOJ has really, really jumped on these documents. I’ve seen them show up in a number of different complaints. And so we often just remind people that what they relay from their antitrust lawyers to the other side may not be privileged. So we encourage them to have those conversations be done through outside antitrust counsel under a joint defense or common interest privilege.

MR. MIKE COWIE: So the next slide, slide seven, is from the DOJ case against AT&T in the prior administration. That’s where DOJ lost. They had challenged the deal under a vertical merger theory. So when that complaint came out, I, like many others, stopped and reviewed it. And we were not involved in that particular deal. So again, these are observations from the sidelines. And after reading the complaint, I walked down the hall to Rani’s office and I said, this looks weak. It’s missing deal documents. It’s very thin on documents. It looks like it’s based on some kind of economic model.

There was a single document quoted in the complaint, just one. And it’s a statement by AT&T saying after the merger, we can operate our cable business as a cash cow. So that was the documentary evidence. Nothing about raising prices. Nothing about raising the price of, say, CNN for Comcast or Dish. Nothing about this favoring rival cable systems. To me, it was an unremarkable statement that you operate a business as a cash cow.

MR. RANI HABASH: I think you saw that come out in the judge’s opinion in that case, where he thought this whole theory that AT&T was going to raise prices on its rivals was very speculative. There was little support other than this sort of complex economic model that DOJ had come up with to potentially predict the price increases. But they didn’t have any documents sort of supporting that idea or that theory or that sort of plan after the merger to create harm in the marketplace.

MR. MIKE COWIE: Yeah. And to me, it was evidence when I saw the complaint. Because you would expect the Justice Department to include the evidence. That’s the first thing the judge is going to read. And it was very thin. So, as I said, my strong impression after reviewing the complaint was this is going to be a very, very hard case for the Justice Department. So we can look at this slide. And then we’re going to take some questions from Nate or your questions.

And this is slide eight. This deal wasn’t a massive deal, about a $600 million deal. The buyer is publicly traded, based in Germany, chemical sector. You probably haven’t heard the names of the companies Evonik and PeroxyChem. I was the lead for the seller, PeroxyChem. And I was unsuccessful in persuading the FTC to close the investigation. It was a disappointment. The FTC sued to block the deal. And I had been telling the FTC we’ve got a pro-competitive story here. It’s well documented. There’s a complete absence of hot documents. There are no plans to raise prices. There are no plans to cut capacity.

We ended up getting sued. And we litigated this in federal court in D.C. And it was the first loss for the FTC in federal court in D.C. in over a decade, actually since Whole Foods/Wild Oats, which we also handled. And at trial, when I was doing a redirect of our CEO, I said, did you ever write an email or document saying the merger would lead to high prices? No. Did you ever see an email

saying that? No. Did you ever hear that in a discussion? No. And we were able to do that with confidence that he wouldn’t be undermined with any documents. We ended up doing that with all of our witnesses to just to reify and show the court there was an absence of hot documents and it turned out to be effective. Because we won the case.

And what the judge wrote in the decision, he said lacking a smoking gun, the FTC fires away with a few squirt guns. So I think that’s a good illustration of how I think like AT&T, if the government doesn’t have these kinds of hot documents, there are scenarios where companies can win in litigation. It is an uphill battle to beat the government in these merger cases. But the absence of hot documents is, I would say, a key variable.

MR. NATE SODERSTROM: Excellent. Mike and Rani, thanks for kind of walking us through that – really interesting stuff. Just to kind of build on a point I think you were just making, but maybe explore in a bit more depth. Obviously, you talked a bit about the importance of hot documents to government agencies and their decisions to bring or not bring merger challenges. But then thinking about courts and federal judges, I guess in your experience, how important have these types of hot documents been to the federal judges who ultimately make these decisions when these matters do end up in litigation?

MR. RANI HABASH: Yeah, that’s a very good question, Nate. So a lot of these statements, like Mike said, the government’s really putting them in the complaint, putting their best evidence forward in the complaint. They try and use sort of catchy one liners and splashy statements up front. And I think it’s obviously coloring the perception of the case from the very beginning. And you get into these cases, and I’m sure you’ve all seen it, but there’s economic models going back and forth, econometrics being thrown around. And we often see the judges sort of throw up their hands trying to figure out what to do with all that stuff? How important is it?

And a lot of times these hot documents have a more emotional or intuitive appeal. I think going back to the 900 pound gorilla example I mentioned earlier or the cash cow example that Mike went over, I mean, some of those statements on their own, they sound bad. But then when you really dig into the evidence—and courts really do dig into the evidence when you have tons of witnesses and millions of documents and all kinds of briefs in these cases. And they’re important. I mean, they do show up a lot of times in the judge’s decision. But in other cases, there’s a lot of other evidence that you can use to contradict some of these statements. And so it’s a lot of what we do in trying to show maybe that there wasn’t factual support for a statement that someone may have made.

And I think one of the problems is – and this is frequently the context that it comes up in is that the executives are trying to sell a deal to their board, and they sort of make a lot of statements that may not necessarily be backed by strong economic analysis that someone spent months on like we do

in some of these court cases or investigations. And so they may sort of over exaggerate some of their statements in those pitches to their boards. And then, of course, those end up in the DOJ case.

MR. NATE SODERSTROM: Yeah, that makes sense. I think another question we were thinking about is – obviously, you guys have both been doing this for a while. Have you seen the government’s approach to these types of hot documents change at all in the past five, ten, fifteen years? Or is it your sense that it’s been a relatively consistent?

MR. MIKE COWIE: One change, Nate, is their demands for text messages and communications on other platforms. So I think the demands are deeper. In terms of the content, I talked about the Facebook example. We are seeing greater use of statements about early stage competition. Where in the past, that was viewed as too crystal ball. I think that’s become more prevalent in the last couple of years.

MR. RANI HABASH: Yeah, to build on Mike’s point, I think the biggest change, maybe it’s not by the agencies, but there is just the proliferation of communications now. It used to be phone calls and letters. And then it was emails. And then we sort of got into text messages between people. And then now we have all the instant messaging systems as well and chats and things, transcripts, that we have to produce to the government.

And so there’s sort of more informal settings. Someone may not have thought as hard about what they were writing in some of those conversations. And the Sabre/Farelogix Trojan Horse statement that I mentioned earlier, that was actually from a text message between buyer employees in that case. And so you’re starting to see more and more of that come up just because there are more electronic means of communications. And so the government is really jumping on that these days.

MR. JEFF BLISS: Hi, guys. This is Jeff Bliss. Thanks so much again for joining us. I had a couple of quick questions. The school of antitrust that’s in control of the agencies now has a little disdain for these econometrics. They see it as part of a kind of this technocratic approach that has not been aggressive enough in terms of dealing with antitrust problems. So it would seem, and I want to know if you agree with this, that hot docs, if anything, are more important now than ever in these cases. One, if you would agree with that. And two, if that’s so, how can we expect that’s going to change what we see at trial from the government and from the defendants?

MR. MIKE COWIE: Yeah, Jeff, I think I very much agree with that. So just to go back and start with the prior administration. Joe Simons was the Chair of the FTC and I was a direct report to Joe during the Bush Administration. Joe put a ton of weight on economics. I remember telling clients when you go to the FTC to meet with leadership, this is in the prior administration, you’ve got to

bring an economist with you. But that’s not the case anymore. I don’t think that’s the point of view. Economic modeling we expect will get less weight. Econometrics will get less weight.

So what are you left with? Hot documents are going to carry more weight. You’re left with documents and you might say there might be a greater willingness to listen to opposition groups, competitors. But I think we can expect documents to carry more weight.

MR. RANI HABASH: Yeah, Jeff, I think you sort of hinted at it. But I think there is a concern out in the business world that the FTC and DOJ may be working on sort of some new theories and novel theories and pushing the envelope on what’s been done in the past in order to potentially step up antitrust enforcement that some people have said has been too lax in the past.

Now, the problem with a lot of that is going to be that they have to get these deals through the court. So they can come up with a novel theory, but a lot of times it’s going to be speculative without any kind of documentation actually supporting the theory. So when you go in front of a judge and you don’t have any hot documents to put in front of them supporting the theory, it’s all just completely speculative. I mean, we saw some of this in the AT&T/Time Warner case, like I mentioned earlier, it’s going to make it harder for the government to win those cases. So they’ll come up with new theories. They’ll go to court. But then proving those theories and meeting their sort of burden of proof is going to be hard for them if they don’t have these types of documents to support them. So they’ll always work on their economic analysis as well, but it’s sort of a two- pronged approach that you need sort of the economics and you need some of these documents to make things less speculative and to sort of quantify potential harm in these deals.

And I think another thing that comes up is just whether these statements are actually supported by data or if they’re just puffery. So I think a statement that supported by actual data, by economic data, is actually stronger than one like the 900 pound gorilla that is colorful, but not necessarily all that indicative of whether a price increase is likely from the merger.

MR. JEFF BLISS: Okay, and just kind of a follow-up and going in that same vein, I’m wondering if either of you are aware of any case you could say, yeah, this case was primarily won by the government, by hot docs. That’s just kind of one. And Rani, what you just said—and I understand what you’re saying is true. Is there any way a third party complainant can at all be helpful in terms of getting those documents, especially if the merging parties have scrubbed clean kind of the documentary record? Is there a way for a third party to be helpful here?

MR. MIKE COWIE: Yeah, so a third party may be a customer. So you could have a B2B marketplace where the third party is a customer and it may have negotiations, documents or statements where a merging party comes in and says you have no choice. You have to use us. So,

yes, that does happen. It happens on a non-public basis. But yes, third parties, as customers, may have documents that could be used by the government, no question. Competitors, it’s harder. It’s all a little bit secondary. I mean, sometimes competitors are often subpoenaed, and those documents can matter too. But I would say foremost customers.

MR. RANI HABASH: Yeah, and to your first part of that question, I mean, I would say almost every case that the government has won, they’ve been successful in putting forward hot documents. I can’t remember a case where they were successful without having these types of colorful statements in them. And Mike, if you can think of one that was particularly bad.

MR. MIKE COWIE: Well, a case that they won based on hot documents. The Visa case, the parties abandoned that merger, but the hot documents in that case, in the complaint, were powerful. I mean, Bazaarvoice, that goes back a bit. It was kind of a high tech, arguably rapidly changing, category. And they had colorful documents, documents projecting price increases.

MR. RANI HABASH: Yes, I think the strongest cases for the FTC and DOJ are when they have the hot documents and they have sort of the economic modeling to support some of the theories that may be coming out of those documents.

MR. NATE SODERSTROM: Yes, that certainly makes sense. So obviously, here we’ve kind of seen a shorter version of your presentation. I mean, the longer version is something like 125 slides. The point is you guys have seen a lot of these docs. Against that backdrop, is there any particular category of document or type of statement that you’ve uncovered that you view as particularly problematic for getting a deal across the finish line with the agencies?

MR. MIKE COWIE: Yeah, I think synergy analysis is very important. There’s a point of view that the agencies are too incredulous on efficiencies, that efficiencies will never carry the day. But you want to have pro-competitive, fact-based themes for supporting the deal. The best setting for companies to be in is they’ve got—you can think of this as four or five bumper sticker, fact-based themes where the commercial, financial case for the deal corresponds with the regulatory case. And it could be a growth story. It could be complementary technologies. You want to have a pro-competitive theme, and that’s reflected in internal documents and external communications and investor relations and PR.

So when you have bad synergy documents, you’re getting off to a bad start. If you’re modeling an abnormal price increase, the agencies have internal accountants that will look at pro-forma financials and they’ll see how you’re modeling pricing. If it’s a manufacturing sector deal, are you eliminating capacity? Is that part of the financial modeling? So I think the synergy documents on the buyer side are going to ca

On the sell side, the dynamic we often have is the seller is going to work with bankers and they’re going to create a confidential information memorandum, a CIM. And they have a financial incentive to brag and say we’re dominant. There are barriers to entry. Some of the illustrations in the book, there are statements there’s a moat around our business.

So you have, I mean, I think of it as a really smart 28 year old investment banking analyst with MBA jargon. And so I would say those sell side CIMs are the source of a lot of bad statements. Because they’re bragging and maybe exaggerating about the seller’s dominance, the market position or pricing power.

MR. RANI HABASH: We always joke that they love using the term high barriers to entry and moat. It’s almost like it’s built into the template. And you could have a merger between two lemonade stands and it seems like they would pitch that as a deal with high barriers to entry, at least from the investment banking perspective. And so we encourage people to really make sure that they know what they’re saying there. And that it’s not just the piece of the template that they think is going to help them extract more value out of the deal.

MR. NATE SODERSTROM: Right, right. And then I guess to follow-up on that. Again, these types of documents have gotten folks in trouble in front of the agencies, in front of courts. I wonder if you could talk a bit about the role of antitrust counsel when it comes to how to avoid creating these types of documents in the first place.

MR. MIKE COWIE: Yeah, I think I hit on that in part, Nate. I encourage companies, whether it’s the bankers, the business lead, to develop pro-competitive deal teams. And this is not something that can come out of the mouths of Washington-based antitrust lawyers. It’s got to correspond with the commercial realities and the financial case for the deal. And if you have pro-competitive deal themes, genuine pro-competitive deal themes, and you want to have message consistency, that’s the best place to be. I mean, that’s the best way to avoid getting in this book.

MR. RANI HABASH: Yeah. We always see it on these deals. There’s a lot of people running around during the due diligence process, whether it’s bankers, the lawyers, the executives, the investor relations folks, the government affairs folks. Everyone’s sort of running around and they have their own idea of why the deal is being done or they invent ideas. And you see a whole variety of them. So what we like to do is sit down with the companies and figure out exactly why they are doing the deal. What’s the pro-competitive rationale for it? And it helps, we found, to sort of communicate that to the entire deal team. So that there aren’t people running around making up theories as to why they’re doing the deal in the first place. So that’s just, I think, a good practice, in any case, like Mike said, to make sure that you have message consistency and you’re not creating

just a whole host of government exhibits, just from some people who may not have been really in the know or may not have been actively thinking about the deal rationale.

MR. NATE SODERSTROM: Right, right. We have a question from the audience. This is an interesting one. Here’s the question. How, if at all, might public market investors handicap the likelihood of hot docs existing when evaluating a public market transaction?

MR. RANI HABASH: Yes, I think one easy way is you can look at some of the investor presentations that these companies put out, some of the prospectuses that they put out, and some of the earnings transcripts as well. I mean, if they’re out there in public touting that they have a monopoly or they have pricing power or that someone’s a competitive threat to them, that’s usually a good signal that internally they’re saying a lot of those same things. I mean, those types of statements don’t make it into earnings calls for the first time, they’re something that they’ve probably thought about internally. And so I’d say that’s sort of one way to handicap the odds that you’re going to find these documents internally once you do some digging.

MR. MIKE COWIE: Yeah, if you have access to significant customers and if there are customer surveys or ways of understanding how customers see the competitive options, that may be somewhat predictive of what else you could see. You could see it. If there’s a history of antitrust litigation relatively recent, that may be a data point as well.

MR. JEFF BLISS: I just had a quick question about, let’s say it’s pretty obvious to the government how you can exploit a bad document. But I’m curious. Let’s say you have a CEO of a merging company, the buyer, who just makes a statement that just looks really bad and is featured throughout a lawsuit or whatever. I’m just wondering if you can talk about how you would do damage control on that, perhaps using testimony or some other tools to try to do damage control.

MR. RANI HABASH: Yeah, it’s a really good question, Jeff. I mean, we run into this all the time. We get these documents and the first thing we think about is, well, is the statement actually true? And so we set out to see if there’s other evidence that supports it or contradicts it. And often what we find is that there’s a whole host of other statements, often by the same person or in the company’s data, that contradicts it.

So one example is an executive may say this is our only competitor. But then when we go and open up the bid data or win/loss data, we find that the company is losing deals to 20 other competitors, for example. And so that’s the type of thing where the statement looks bad on its face and it says what it says. But you do set out to find other documents that contradict it or data that shows the statement itself wasn’t true in the first place. And it’s usually out there. I think, like I said before, a lot of these statements get exaggerated or were sort of overstated. And then once you dig into the

other million documents that this person wrote, you may find that they didn’t actually believe that to be true. So that’s how I usually deal with it.

MR. NATE SODERSTROM: Yeah, that makes sense. Jeff, that is all I have on my end. Do you have any additional questions on yours?

MR. JEFF BLISS: No, it’s been really fascinating just to kind of hear what you do with a hot doc and which ones and how to go about damage control and all that.

MR. NATE SODERSTROM: Yeah, perfect. Mike and Rani, thanks again. As Jeff said, this was really interesting and I think a lot of key themes here, especially with the new administration coming in, maybe the importance of these docs even increases further. And that makes this question very relevant today. So thank you again. Thank you to everybody that dialed in. And I believe that concludes our call for today.