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From Antitrust Law Daily, June 13, 2016

U.S. requires divestiture to avoid ‘merger to duopoly’ in media contact database market

By Jeffrey May, J.D.

In order to preserve competition in the U.S. media contact database market, the Department of Justice Antitrust Division is conditioning the proposed acquisition of UBM plc's PR Newswire business by private equity firm GTCR Fund X/A AIV LP on the divestiture of PR Newswire's "Agility" media database, monitoring, and analysis business. The divestiture would resolve Antitrust Division concerns that the acquisition, as originally proposed, would have combined the largest and third largest media contact database providers in the United States (U.S. v. GTCR Fund X/A AIV LP, Case 1:16-cv-01091).

In a complaint filed in federal district court in Washington, D.C. on Friday, the government alleged that the proposed acquisition would create a duopoly in the U.S. market for media contact databases. Businesses and public relations agencies rely on media contact databases to identify journalists and other influencers for public relations purposes, according to the Justice Department.

GTCR owns Cision US Inc., which is reported to be the dominant media contact database provider the United States through its flagship public relations workflow software suite. PR Newswire is a leading provider of commercial newswire services. Its Agility business has been identified as the nation’s third-largest media contact database provider.

Under the terms of the proposed final judgment, GTCR must divest Agility to Innodata Inc. or to another buyer approved by the United States. The defendants must divest the entire Agility business, including the media contact database as well as the other Agility software modules, as the media contact database is often sold with these other modules as part of an integrated suite, according to the Justice Department. This is intended to ensure that Agility will be operated by the purchaser as a viable, ongoing business that can compete effectively in the relevant market.

U.K. investigation. The Justice Department noted that it worked closely with the United Kingdom’s Competition & Markets Authority (CMA) in reviewing the transaction. The CMA sought comment on the transaction earlier this year. The statutory deadline for a decision in phase one of the investigation is July 26.

Attorneys: Jonathan M. Justl for U.S. Department of Justice. United States Department of Justice. Amanda P. Reeves (Latham & Watkins LLP) for GTCR Fund X/A AIV LP and Cision US Inc. Harry T. Robins (Morgan, Lewis & Bockius LLP) for UBM plc.

Companies: Cision US Inc.; GTCR Fund X/A AIV LP; UBM plc; Innodata Inc.

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