Carlyle Private Equity Firm Sponsors Prospective IPOs

UCI International, Inc. Form S-1 filed on 7/27/10 (SEC file no. 333-168336):
UCI was formed at the direction of The Carlyle Group ("TCG") in 2006 as the holding company of United Components, Inc., a supplier to the vehicle replacement parts market.  United had acquired all of its then-existing operating units in June 2003 for a purchase price of $808 million.  The acquisition was financed through a combination of debt and $260 million in cash contributed through Carlyle limited partnerships.  UCI proposes a $200 million IPO in an underwritten deal led by Merrill Lynch and Deutsche Securities. 

Booz Allen Hamilton Holding Corp. S-1 filed on 6/21/10 (SEC file no. 333-167645):
Booz Allen Hamilton Inc. completed the separation of its U.S. government consulting business from its commercial and international consulting business, the spin off of the commercial and international business, and the sale of 100% of its outstanding common stock to Booz Allen Holding, which was majority owned by Carlyle, in July 2008.  The Registrant is the successor to the government business of Booz Allen Hamilton following the separation.  Following the spin off, Booz Allen Hamilton was indirectly acquired by TCG by merger for total consideration of $1,828 million. The merger and spin-off agreements are Exhibits 2.1 and 2.2, respectively.

Biopharm Co. Offers Tradable CVRs as Part of Merger Package

In connection with a reverse triangular merger whereby Abraxis BioScience, Inc. will become a wholly-owned subsidiary, Celgene Corp. registered common stock and contingent value rights, or CVRs, on a Form S-4 dated July 29 (file no. 333-168369).  Pursuant to the merger agreement, each Abraxis common share will be converted into the right to receive an upfront payment of $58.00 in cash and 0.2617 shares of Celgene common stock. The upfront payment values Abraxis BioScience at approximately $2.9 billion, net of cash. 

Each Abraxis share will also receive one CVR that will entitle its holder to receive additional cash payments if certain U.S. regulatory approval milestones are achieved and/or annual net sales figures are met by certain Abraxis products.  Celgene has agreed to attempt to list the CVRs on The NASDAQ Global Select Market.

The July 2008 merger (333-152690) between Fresenius Kabi Pharmaceuticals and APP Pharmaceuticals, Inc. also included CVRs with merger consideration that was otherwise all cash.  The Fresenius CVRs, which are tied to the “Adjusted EBITDA” of APP, trade on NASDAQ under the symbol “APCVZ”.  The September 2009 merger (333-162238) between Ligand Pharmaceuticals Inc. and Neurogen Corp offered Neurogen shareholders both equity and CVRs as consideration, but the CVRs are not listed on any exchange and are subject to general transfer restrictions.

SEC Adopts Amendments to Part 2 of Form ADV

By Final Rule dated July 28 and to be effective 60 days after publication in the Federal Register, registered investment advisers will be required to provide new and prospective clients with a brochure and brochure supplements written in plain English.  Advisers must file their brochures electronically, and the SEC will make them available to the public through the Investment Adviser Public Disclosure website.

Since 1979, the SEC has required IAs to deliver a written disclosure statement to clients pursuant to rule 204-3 under The Investment Advisers Act of 1940.  Part 2 of Form ADV sets out minimum requirements for this disclosure statement, which is commonly referred to as the "brochure."  In the past, Part 2 has required IAs to respond to a series of multiple-choice and fill-in-the-blank questions organized in a “check-the-box” format, supplemented in some cases with brief narrative responses. IAs have had the option of providing information required by Part 2 in an entirely narrative format, but few have done so. 

The revised Part 2 requirements include two sub-parts, Part 2A and Part 2B.  Part 2A contains 18 disclosure items about the advisory firm that must be included in the brochure, including disclosure of the adviser’s business, fees and compensation, conflicts of interest, disciplinary history, brokerage practices and other information that help clients make an informed decision about whether to hire or retain that adviser.  The Part 2B "brochure supplement" includes information about certain advisory personnel on whom clients rely for investment advice.

Reorganized Auto Parts Manufacturer Registers Securities for Reoffer

Michigan-based Cooper-Standard Holdings Inc. emerged from Chapter 11 bankruptcy on May 27 through a series of transactions contemplated by the Plan of Reorganization, including a private placement to certain creditors.  The Form S-1 filed by Cooper-Standard on July 26 (file no. 333-168316) was filed in connection with a registration rights agreement that was filed as an exhibit to the Form 8-K filed on June 3. 

Under the reorganization, prepetition noteholders were permitted to participate in a common stock rights offering conducted during the solicitation of votes to accept or reject the Plan.  Additional common shares as well as 7% cumulative participating convertible preferred shares were issued to certain creditors pursuant to a commitment agreement that provided for the backstop of the rights offering.

The Chapter 11 Plan of reorganization was filed as an exhibit to the Form 8-K filed by Cooper-Standard on May 24, and the Commitment Agreement with the backstop creditors was filed as Exhibit 10.49 to the Form 10-K for FY09 filed on 3/31/10 (file no. 333-123708).

Commodity Pools Designed as Short-Term Trading Vehicles Emerge

Direxion Shares ETF Trust II intends to offer a series of exchange traded funds that seek daily leveraged investment results that correlate positively (or negatively) to 300% the daily return (or inverse return) of a target benchmark, generally a commodity-based or currency-based instrument.  The Delaware statutory trust is organized into separate series that are subject to regulations as commodity pools under the Commodity Exchange Act, and their sponsor is subject to regulation as a commodity pool operator.  None of the ETFs are a mutual fund or any other type of investment company under the Investment Company Act of 1940. 

Direxion II filed its Form S-1 on July 20 (file no. 333-168227), registering common units of beneficial interest that will be separately offered for each fund.  ETFS Collateralized Commodities Trust filed a Form S-1 on May 27 (333-167167) in connection with 18 initial ETFs that are intended to be used as short-term trading vehicles.  The ETFS funds seek daily investment results which correspond to 100% or 200% of the daily performance of the specified commodity index. 

The emergence of ETFs organized as a trust of commodity pools is a fairly recent experience.  More commonly, an ETF trust has tended to be an open-end management investment company registered under the 1940 Act.  Direxion Shares ETF Trust, a non-diversified series of mutual funds that seek to provide daily investment results much like Direxion II, filed a Registration Statement on Form N-1A on 9/16/08, file no. 811-22201.