[Simpson Thacher & Bartlett LLP letterhead]
VIA EDGAR AND FEDERAL EXPRESS
| Lesli Sheppard Senior Staff Attorney Securities and Exchange Commission Division of Corporation Finance 100 F Street, NE Washington, DC 20549 | July 18, 2005 |
Ladies and Gentlemen:
On behalf of Rockwood Holdings, Inc. (the "Company"), we hereby submit for your review Amendment No. 3 ("Amendment No. 3") to the above-referenced registration statement (the "Registration Statement") of the Company originally filed with the Securities and Exchange Commission (the "Commission") on February 11, 2005, pursuant to the Securities Act of 1933, as amended. An electronic version of Amendment No. 3 has been concurrently filed with the Commission through the Commission's electronic data gathering, analysis and retrieval ("EDGAR") system. We have enclosed four copies of Amendment No. 3, which have been marked to show changes made to the Registration Statement.
In addition, we are providing the following responses to the comments contained in the comment letter of the staff of the Commission (the "Staff") to the Company, dated July 13, 2005, relating to the Registration Statement. For convenience of reference, the text of the comments in the Staff's letter has been reproduced in bold herein. Please note that all page numbers in our responses are references to the page numbers of Amendment No. 3, unless otherwise noted.
FORM S-1, AMENDMENT NUMBER TWO, FILED JUNE 28, 2005
General
In response to the Staff's comment, the Company respectfully informs the Staff that the Company's subsidiaries will cease conducting business in Iran. None of the Company's wholly-owned subsidiaries that have sales into Iran (Chemetall GmbH, Chemetall Italia s.r.l., or Chemetall plc) is party to any contract pursuant to which future sales may be made in Iran except with respect to the two license agreements discussed below. All other sales by these subsidiaries were "spot purchases" by customers, usually made pursuant to purchase orders. The following customers have submitted purchase orders which have not yet been filled by our subsidiaries: Esfahan Industrial Complex Shetabkar; Goharfam Manufacturing Company; IPCO; Iran Khodro; Iran Khodro Diesel; Iran Radiator; Mahshahr Pipe Protection (Tehran); Mobarakeh; Puyarang Co.; Saipa; Three Stars Service; and TSS Company. Our subsidiaries expect to complete these outstanding purchase orders within approximately six months.
In addition, Chemetall GmbH is giving notice immediately that it is terminating the two license agreements with two privately-owned entities in Iran, Goharfam Manufacturing Company and Puyarang Co., pursuant to which it licenses certain surface treatment technology for metal surfaces (described in detail in the Company's June 28, 2005 response letter). Pursuant to the termination provisions of such
agreements, the termination of the Goharfam agreement will be effective February 18, 2006 and the termination of the Puyarang agreement will be effective August 10, 2006.
Upon fulfillment of outstanding purchase orders and obligations under the two license agreements, the Company's subsidiaries will no longer conduct business in Iran. Furthermore, the Company will immediately undertake procedures to dissolve its Iranian subsidiary, Bonder Iran S.S.K.
In response to the Staff's comment, the Company respectfully informs the Staff that it does not believe that its subsidiaries' sales in Iran, including sales to entities owned by the Iranian government, constitute a material investment risk to stockholders that could negatively impact the Company's reputation and share price. The Company's conclusion is based upon the facts that (a) it believes such sales are lawful, (b) the Company has owned these subsidiaries for a limited period of time, (c) the limited sales volume in Iran represents ade minimis portion of its subsidiaries' net sales, (d) the customers in Iran are commercial enterprises and (e) the products are used for non-military applications.
Notwithstanding the Company's belief that the activities of its subsidiaries in Iran do not constitute a material investment risk to stockholders, the Company's subsidiaries will cease doing business in Iran, as described in the response to Comment 1. Furthermore, in response to the Staff's comment, the Company has revised its "International Operations" risk factor to include the following language:
"Furthermore, our subsidiaries are subject to the export controls and economic embargo rules and regulations of the United States, violations of which may carry substantial penalties. These regulations limit the ability of our subsidiaries to market, sell, distribute or otherwise transfer their products or technology to prohibited countries or persons. Failure to comply with them could subject our subsidiaries to fines, enforcement actions and/or have an adverse affect on our goodwill and the value of our common stock."
Risk Factors, page 16
Effectiveness of Internal Controls, page 30
In response to the Staff's comment, the Company has revised "Risk Factors—Risk Factors Relating to Our Business—Effectiveness of Internal Controls—Our internal controls over financial reporting are currently not effective in certain areas, which could have a significant and adverse effect on our business and reputation" accordingly.
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disclose more fully when and how the company expects to do so. Please explain in detail the steps you have taken (or plan to take) and procedures you implemented (or plan to implement) to correct the material weakness you identified.
In response to the Staff's comment, the Company has revised "Risk Factors—Risk Factors Relating to Our Business—Effectiveness of Internal Controls—Our internal controls over financial reporting are currently not effective in certain areas, which could have a significant and adverse effect on our business and reputation" accordingly.
In response to the Staff's comment, the Company has revised "Risk Factors—Risk Factors Relating to Our Business—Effectiveness of Internal Controls—Our internal controls over financial reporting are currently not effective in certain areas, which could have a significant and adverse effect on our business and reputation" accordingly.
In response to the Staff's comment, the Company has revised "Risk Factors—Risk Factors Relating to Our Business—If we are unable to implement the requirements of Section 404 in a timely manner or if we conclude our internal controls are not effective in other areas, we may be subject to sanctions or investigation by regulatory authorities and incur additional compliance costs and the financial markets may react negatively" accordingly.
Comment applicable to your overall filing
The Company understands the Staff's comments are applicable to Dynamit Nobel as well as Rockwood Holdings. In response to the Staff's comment, the Company has made corresponding changes where appropriate to the Dynamit Nobel disclosure.
Unaudited Pro Forma Condensed Combined Information, page 40
In response to the Staff's comment, the Company has included a reconciliation in table format between the historical and pro forma weighted average shares used in computing basic and diluted EPS in the "Unaudited Pro Forma Condensed Combined Financial Information" section.
Management's Discussion and Analysis
Results of Operations, page 70
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In response to the Staff's comment, the Company has revised the disclosure under "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations" accordingly.
Rockwood Financial Statements
In response to the Staff's comment, the Company respectfully informs the Staff that the financial statements and corresponding financial information for the quarter ended March 31, 2005 should not be labeled as restated because the Company had not previously issued such financial statements or disclosed corresponding financial information for the quarter ended March 31, 2005.
Note 3. Segment Information, page F-21
In response to the Staff's comment, the Company respectfully wishes to clarify that the chief operating decision maker does not receive or review identifiable asset amounts for purposes of making decisions about allocating resources to the segment and assessing its performance. In addition, the Company has expanded the disclosure in Note 3 to:
ROCKWOOD SPECIALTIES GROUP'S
FORM 10-K/A#2 FOR THE YEAR ENDED DECEMBER 31, 2004
Comments applicable to your overall filing
The Company respectfully informs the Staff that it will address the above and below comments in the future filings and interim filings of Rockwood Specialties Group, as applicable, and that it will address the above comments in the interim filings of Rockwood Specialties Group, as applicable, as well.
Item 9A. Controls and Procedures
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The Company respectfully informs the Staff that it will address the above comment in the future filings and interim filings of Rockwood Specialties Group, as applicable.
The Company respectfully informs the Staff that it will address the above comment in the future filings and interim filings of Rockwood Specialties Group, as applicable.
Please note that the Company has included certain changes to the Registration Statement other than those in response to the Staff's comments.
Please call me (212-455-2758) or Anette Somosi (212-455-2485) of this firm with any questions you may have regarding this filing or if you wish to discuss the above responses.
| Very truly yours, | ||
/s/ ROXANE F. REARDON Roxane F. Reardon |
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