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Find out how Gardner Bell's experience promoting financial and economic development initiatives both locally and abroad informs his role as an attorney. Find out more>

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On December 1, 2016, Parker Hannifin Corporation and CLARCOR Inc. announced that the companies have entered into a definitive agreement under which Parker will acquire CLARCOR for approximately $4.3 billion in cash, including the assumption of net debt. The transaction has been unanimously approved by the board of directors of each company. Upon closing of the transaction, expected to be completed by or during the first quarter of Parker’s fiscal year 2018, CLARCOR will be combined with Parker’s Filtration Group to form a leading and diverse global filtration business. Bass, Berry & Sims has served CLARCOR as primary corporate and securities counsel for 10 years and served as lead counsel on this transaction. Read more here.

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Securities Law Exchange BlogSecurities Law Exchange blog offers insight on the latest legal and regulatory developments affecting publicly traded companies. It focuses on a wide variety of topics including regulation and reporting updates, public company advisory topics, IPO readiness and exchange updates including IPO announcements, M&A trends and deal news.

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GovCon Trade Blog: DSS Releases New Guide to Help Cleared Contractors Meet Requirements of FOCI Mitigation Agreements

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May 23, 2016

On May 11, 2016, the Defense Security Service (DSS) released a new guide on mitigating and managing affiliate operations for entities bound by a Foreign Ownership, Control, or Influence (FOCI) mitigation agreement. The guide, titled Navigating the Affiliated Operations Plan: A Guide for Industry, outlines how companies can identify whether they are engaging in affiliated operations, submit an Affiliated Operations Plan (AOP), and ensure that they are properly mitigating potential risks. In compiling an AOP, a company is expected to describe all operations and services it intends to share with affiliates, as well as the potential risks of the collaboration and how those risks will be mitigated. The guide emphasizes that, unless there are special circumstances, an AOP must be provided before a company can start leveraging any affiliated operations.

Affiliated operations are cooperative administrative, commercial or operational endeavors between a mitigated company and an affiliate. Sharing human resources, disclosing financials and accounting data, permitting audits, engaging in business development, collaborating in marketing, sharing personnel, and sharing legal counsel are all considered affiliate operations that must be approved by DSS. According to DSS, such services can potentially permit an affiliate entity to exert undue influence and undermine the managerial and operational independence of a mitigated company. Another concern is the potential disclosure of confidential and operational security information as a result of access to a mitigated company's records. To alleviate the risk of a breach in security, the guide recommends transparency through close collaboration with DSS, the Government Security Committee (GSC) and Facility Security Officers (FSOs). The guide encourages GSC review of the type of information disclosed to the affiliate, as well as the method and format of the disclosure. To protect operational independence, the guide mandates that mitigated companies reserve the ultimate decision-making authority for themselves. A mitigated company should demonstrate that it is not dependent on an affiliate and has alternative means for obtaining a shared service.

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To continue reading the content in this article on the firm's Government Contracts & International Trade blog, please click here to view the post.

Bass, Berry & Sims' Government Contracts & International Trade blog features news, commentary and insight on the demanding and ever-changing regulatory environment of contracting with federal, state and local governments, and international trade issues when conducting a global business.


 


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