Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, New York 10019-6064
March 15, 2021
Via EDGAR
Perry J. Hindin
Office of Mergers & Acquisitions
Securities and Exchange Commission
100 F Street, NE
Washington, D.C. 20549
| | Re: | Perspecta Inc. |
| | | Schedule 13E-3 |
| | | Filed by Perspecta Inc. et al. |
| | | Filed February 19, 2021 |
| | | File No. 5-90499 |
| | | |
| | | Preliminary Proxy Statement on Schedule 14A |
| | | Filed February 19, 2021 |
| | | File No. 1-38395 |
Ladies and Gentlemen:
On behalf of our client, Perspecta Inc. (the “Company”), and pursuant to the applicable provisions of the Securities Exchange Act of 1934, as amended, and the rules promulgated thereunder, please find enclosed for submission with the Securities and Exchange Commission (the “Commission”) a complete copy of Amendment No. 1 to the above-captioned Schedule 13E-3 (as amended, the “Schedule 13E-3”) and a complete copy of Amendment No. 1 to the above-captioned Preliminary Proxy on Schedule 14A (as amended, the “Proxy Statement”), each of which was filed with the Commission on March 15, 2021.
The Schedule 13E-3 and the Proxy Statement reflect the responses of the Company to comments received from the Staff of the Commission (the “Staff”) in a letter from Perry Hindin, dated March 4, 2021 (the “Comment Letter”). The discussion below is presented in the order of the numbered comments in the Comment Letter, and the Staff’s comments have been reproduced to facilitate its review. Certain capitalized terms set forth in this letter are used as defined in the Schedule 13E-3 and the Proxy Statement.
Mr. Perry Hindin
Office of Mergers and Acquisitions
Securities and Exchange Commission
Page 2
The Company has asked us to convey the following as its responses to the Staff:
Schedule 13E-3
| 1. | We note the statement that “[n]o Filing Person, including the Company, is responsible for the accuracy of any information supplied by any other Filing Person.” This statement is inconsistent with the disclosures in the filing, including the required attestation that appears at the outset of the signature pages, and operates as an implied disclaimer for the entire filing except for the portions of the disclosure specifically provided by each filing person. Please revise. |
Response to Comment 1
In response to the Staff’s comment, the Schedule 13E-3 has been revised on page 1 to remove the statement.
Preliminary Proxy Statement
Background of the Merger, page 13
| 2. | The third to last paragraph on page 18 indicates that on January 8, 2021, Perspecta distributed to PE Firm E a revised bid process letter and requested that it provide a definitive proposal by January 20. PE Firm E is not referenced in the proxy statement again. Please revise to clarify. |
Response to Comment 2
In response to the Staff’s comment, the Proxy Statement has been revised on page 18.
| 3. | Refer to the discussion on pages 18 and 19 regarding the January 15 meeting. We note that discussion materials, dated January 14, 2021, prepared by Goldman Sachs & Co. LLC and Stone Key Partners LLC for the Disinterested Directors, have been filed as Exhibit (c)(iii) to the Schedule 13E-3. However, there does not appear to be a summary of such materials as described in Item 1015(b)(6) of Regulation M-A. Each presentation, discussion, or report held with or presented by the financial advisor, whether oral or written, is a separate report that requires a reasonably detailed description meeting the requirements of Item 1015 of Regulation M-A. This requirement applies to both preliminary and final reports. Please revise accordingly. In responding to this comment, please note that we do not consider the disclosure on pages 18 and 19 or on page 41 sufficiently responsive to Item 9 of Schedule 13E-3 and Item 1015(b)(6). |
Response to Comment 3
In response to the Staff’s comment, the Proxy Statement has been revised on pages 42 and 43.
Mr. Perry Hindin
Office of Mergers and Acquisitions
Securities and Exchange Commission
Page 3
| 4. | Please consider the preceding comment with respect to the discussion on page 20 regarding the January 25 and January 26 meetings. In addition, please also disclose the outcome of negotiations with Company A. The referenced disclosure indicates that the Board instructed senior management and the advisors to “negotiate with…Company A” and that Goldman Sachs and Stone Key “reviewed and discussed its respective financial analyses of the proposed transaction with…Company A,” but no further mention of such negotiations appears in the proxy statement. Please revise to clarify. |
Response to Comment 4
In response to the Staff’s comment, the Proxy Statement has been revised on pages 20 and 21 to describe additional negotiations with Company A. The Company respectfully advises the Staff that, other than as described under “Special Factors – Background of the Merger”, there was no specific outcome from the continued negotiations with Company A as the Board approved the merger agreement with affiliates of Veritas Capital later the same day as described on page 21 of the Proxy Statement, at which time the Company discontinued negotiations with Company A.
Recommendation of the Board; Fairness of the Merger, page 21
| 5. | Disclosure in the first paragraph indicates that “the members of the Board, other than Mr. Musallam, unanimously determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are fair to, and in the best interests of, the Company stockholders.” Please revise the disclosure to provide the express statement noted in Item 8 of Schedule 13E-3 and described in Item 1014(a) of Regulation M-A. We note the use of the term “Disinterested Shareholders” in the proxy statement. Please note that the staff considers officers and directors of the Company to be affiliates when considering whether such reference is sufficiently specific to satisfy Item 1014(a) of Regulation M-A. Please refer to the definition of “affiliate” in Exchange Act Rule 13e-3(a)(1). |
Response to Comment 5
In response to the Staff’s comment, the Proxy Statement has been revised on pages 1, 9, 21 and 88.
| 6. | The factors listed in Instruction 2 to Item 1014 of Regulation M-A and Item 1014(c), (d) and (e) are generally relevant to each filing person’s fairness determination and should be discussed in reasonable detail. See Question Nos. 20 and 21 of the Exchange Act Release No. 34-17719 (April 13, 1981). Please revise this section to either include the factors described in clauses (vi) and (viii) of Instruction 2 to Item 1014 or explain why such factors were not deemed material or relevant. In addition, if the procedural safeguard in Item 1014(c) was not considered, please explain why the Board believes that the Rule 13e-3 transaction is fair in the absence of such safeguard. Please note with respect to clause (vi) that the disclosure on page 99 only indicates that the Company did not purchase shares in the past sixty days as opposed to the time period referenced in Item 1002(f) of Regulation M-A. In responding to this comment with respect to clause (viii), please consider the disclosure provided by the Sponsor Entities in the first whole paragraph on page 29. |
Mr. Perry Hindin
Office of Mergers and Acquisitions
Securities and Exchange Commission
Page 4
Response to Comment 6
In response to the Staff’s comment, the Proxy Statement has been revised to include a discussion of the factors described in clauses (vi) and (viii) of Instruction 2 to Item 1014 of Regulation M-A, on pages 22, 26, 29 and 30 of the Proxy Statement. The Proxy Statement has also been revised in response to the Staff’s comment on page 26 to address the Disinterested Directors’ consideration of the procedural safeguard in Item 1014(c). The Company acknowledges the Staff’s comment with respect to previous purchases referenced in Item 1002(f) of Regulation M-A and has revised the disclosure on page 102 of the Proxy Statement.
Position of the Sponsor Entities as to the Fairness of the Merger, page 26
| 7. | The first bullet point on page 27 references “current and historical market prices,” but the paragraph only refers to the closing price of the Shares on November 6, 2020, the last trading day before the first public reports of a potential strategic process for the Company. With a view towards additional disclosure, please advise if the Sponsor Entities considered prices more historical than those from the November 2020 time period. We note, for example, the disclosure provided by the Company on page 21 that references the market prices in the table on page 97. |
Response to Comment 7
In response to the Staff’s comment, the Proxy Statement has been revised on pages 27 and 28.
Opinion of Goldman Sachs & Co, LLC, page 29
| 8. | The last bullet point on page 30 indicates that the Tax Attributes are summarized in the section entitled “Special Factors—Certain Unaudited Prospective Financial Information,” but no such summary of the Tax Attributes exists in that section. Please advise or revise to include the summary of such analyses. |
Response to Comment 8
The Company acknowledges the Staff’s comment and in response has revised the Proxy Statement on pages 45 and 47 to add a summary of the Tax Attributes.
Other considerations, page 40
| 9. | So that shareholders can properly evaluate the disclosure regarding the opinion of Stone Key, please revise to provide a reasonably detailed description of the assumptions referenced in the first bullet point of this section. |
Mr. Perry Hindin
Office of Mergers and Acquisitions
Securities and Exchange Commission
Page 5
Response to Comment 9
In response to the Staff’s comment, the Proxy Statement has been revised on page 41.
Plans for the Company After the Merger, page 42
| 10. | Refer to the second paragraph of this section. Please revise to provide the specific information described in Instruction 3 to Item 1013 of Regulation M-A. |
Response to Comment 10
In response to the Staff’s comment, the Proxy Statement has been revised on page 44.
Certain Unaudited Prospective Financial Information, page 44
| 11. | Refer to the third sentence of the last paragraph on page 44. In order for shareholders to properly evaluate the fairness advisor opinions and the projections upon which the opinions in part rely, please disclose the assumptions in greater detail and quantify, where possible. For example, explain the referenced “contract waterfall comprised of the Company’s existing engagements,” quantify the projected “renewed and new business awards,” and discuss with greater specificity the reference to “award date and win probability.” |
Response to Comment 11
In response to the Staff’s comment, the Proxy Statement has been revised on page 46.
Debt Financing, page 52
| 12. | To the extent that progress has been made with respect to documentation governing the new secured credit facilities contemplated by the Debt Commitment Letter, please provide all the information described in Item 1007(d). For example, it does not appear that information regarding collateral is discussed on pages 80 to 81. |
Response to Comment 12
In response to the Staff’s comment, the Proxy Statement has been revised on page 55.
Mr. Perry Hindin
Office of Mergers and Acquisitions
Securities and Exchange Commission
Page 6
If you have any questions concerning the above responses, please do not hesitate to contact either the undersigned at (212) 373-3982 or David E. Sobel at (212) 373-3226.
| | Sincerely, |
| | |
| | /s/ Rachael G. Coffey |
| | |
| | Rachael G. Coffey |
| cc: | James L. Gallagher, Esq. |
| | | Perspecta Inc. |
| | | |
| | Scott A. Barshay, Esq. |
| | Cullen L. Sinclair, Esq. |
| | | Paul, Weiss, Rifkind, Wharton & Garrison LLP |
| | | |
| | Aneal Krishnan |
| | | Veritas Capital Fund Management, L.L.C. |
| | | |
| | F. Xavier Kowalski, Esq. |
| | | Schulte, Roth & Zabel LLP |
