ANALYSIS: HSR Rule Change Would Impact PE, VC Minority Stakes

Private equity and venture capital investors, especially those doing deals in the software industry, will welcome a proposal to exempt certain minority stake purchases of 10% or less from anti-monopoly filings.

The Federal Trade Commission plans to publish and seek comment on a proposed rulemaking that would amend the rules pertaining to purchases of stakes of 10% or less under the Hart-Scott-Rodino Act (HSR). The rule would make it easier for entities to take an active role in companies in which they own a small stake, reducing the cost and uncertainty of doing so.

Another rule change would amend the ...