Re: | RAE Systems Inc. Revised Preliminary Proxy Statement on Schedule 14A File No. 001-31783 Amendment No. 2 to Schedule 13E-3 File no. 005-58813 |
1. | Please expand your response to prior comment 2 to clarify how you determined that Mr. Gausman will not be an affiliate of the Purchaser or otherwise engaged in this transaction given your disclosure on page 45 regarding your expectation of who will be the initial officers of the Purchaser and that the severance agreement relates to a post-merger termination of Mr. Gausmans employment. Given this, and the increased consideration he has received and is entitled to receive, it remains unclear why Mr. Gausman is not a filing person. |
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2. | Given that Lien Chen filed the Schedule 13E-3 in response to prior comment 1, please revise to include all disclosure applicable to her as a filing person. In this regard, you indicate on page 3 of the amended Schedule 13E-3 that she is part of the Rollover Holders; however, the letter to stockholders in your preliminary proxy statement indicates that she is not part of that group. Please revise. |
3. | We reissue prior comment 3. Each filing person is require to disclose whether it reasonably believes the going private transaction is fair to unaffiliated security holders. Item 1014(a) of Regulation M-A. The disclosure under the caption Position of RAE Systems as to the Fairness of the Merger on page 3 does not comply with that requirement because it does not exclude from the fairness determination all affiliated security holders, only Rollover Holders. |
4. | Your revisions in response to prior comment 7 indicate that the Special Committee determined not to proceed with Bidders E-J because its proposals were substantially lower than those of the other bidders. However, it remains unclear how the Special Committee determined that those bidders, despite the substantially lower initial proposals, would not at a later point reach valuations competitive with the other bidders. Please revise. |
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5. | We reissue prior comment 9: |
| You disclose on page 19 that the Battery Ventures proposed material terms to Mr. Chen and Dr. Hsi, but it is unclear what those terms were. It is similarly unclear whether any counterproposals were made and, if so, what were the terms of those proposals; and | ||
| You disclose on page 20 that Mr. Chen and Dr. Hsi had come to an understanding on the important business terms but it is unclear how and when the understanding was reached given that your prior disclosure referred only to a unilateral proposal by Battery Ventures as to proposed material terms and a discussion of the entitys expectations. |
6. | Your revision in response to the fourth bullet of prior comment 11 appear to relate only to how alternative structures of going private would not address risks you face or provide access to capital. Those revision do not appear to address how it was determined that no comparable value could be obtained through other alternatives. For example, why would the consideration to be received in an alternatively structured transaction not be comparable to an acquisition? |
7. | We reissue prior comment 13 as it relates to the Selected Transaction Analysis. Please revise your disclosure on page 30 to include a column that shows the multiple of enterprise value to LTM EBITDA for each comparable transaction as it is included on page 14 of the UBS presentation. Also, clarify supplementally, with a view toward revised disclosure, why the UBS presentation refers to the multiple as enterprise value to LTM EBITDA but the second table on page 30 is captioned transaction value to LTM EBITDA. |
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Response: The Proxy Statement has been revised on page 31 in response to this comment. The reference to transaction value in the table was erroneous, and has been corrected. |
8. | We reissue prior comment 17. The disclosure you added here simply states as a fact that the transaction is not structured such that approval of a majority of the unaffiliated shareholders is required. It does not discuss how the conclusions regarding the procedural fairness are affected by that fact. Additionally, it continues to appear that your disclosure regarding the conclusions of the Rollover Holders as the procedural fairness of the transaction does not address Item 1014(c) of Regulation M-A. Please revise substantially. | |
Response: The Proxy Statement has been revised on page 33and page 37 in response to this comment. |
| The filing persons are responsible for the adequacy and accuracy of the disclosure in the filing; | ||
| Staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and | ||
| The filings persons may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. |
cc: | Susan Wang-Wade (Chair, Special Committee) Randall K. Gausman (Chief Financial Officer) Alfred Browne (Cooley LLP) |
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Robert Ishii (Wilson Sonsini Goodrich & Rosati) Robert Freedman |
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Re:
|
RAE Systems Inc. | |
Revised Preliminary Proxy Statement on Schedule 14A | ||
Filed December 14, 2010 | ||
File No. 001-31783 | ||
Amendment No. 2 to Schedule 13E-3 | ||
Filed December 14, 2010 | ||
File no. 005-58813 |
| the filing persons are responsible for the adequacy and accuracy of the disclosure in the filing; | ||
| staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and | ||
| the filing persons may not assert staff comments as a defense in any proceeding initiated by the Commission or any person uncle the federal securities laws at the United States. |
Sincerely yours, | ||
RAE SYSTEMS INC. | ||
By: /s/ Randall K. Gausman | ||
Name: Randall K. Gausman | ||
Title: Chief Financial Officer |
Re:
|
RAE Systems Inc. | |
Revised Preliminary Proxy Statement on Schedule 14A | ||
Filed December 14, 2010 | ||
File No. 001-31783 | ||
Amendment No. 2 to Schedule 13E-3 | ||
Filed December 14, 2010 | ||
File no. 005-58813 |
| the filing persons are responsible for the adequacy and accuracy of the disclosure in the filing; | ||
| staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and | ||
| the filing persons may not assert staff comments as a defense in any proceeding initiated by the Commission or any person uncle the federal securities laws at the United States. |
Sincerely yours, | ||
Chen Revocable Trust DTD 5/8/2001 | ||
By: /s/ Robert I. Chen | ||
Name: Robert I. Chen | ||
Title: Trustee | ||
By: /s/ Lien Q. Chen | ||
Name: Lien Q. Chen | ||
Title: Trustee |
Re:
|
RAE Systems Inc. | |
Revised Preliminary Proxy Statement on Schedule 14A | ||
Filed December 14, 2010 | ||
File No. 001-31783 | ||
Amendment No. 2 to Schedule 13E-3 | ||
Filed December 14, 2010 | ||
File no. 005-58813 |
| the filing persons are responsible for the adequacy and accuracy of the disclosure in the filing; | ||
| staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and | ||
| the filing persons may not assert staff comments as a defense in any proceeding initiated by the Commission or any person uncle the federal securities laws at the United States. |
Sincerely yours, | ||
Chen Family Foundation | ||
By: /s/ Robert I. Chen | ||
Name: Robert I. Chen | ||
By: /s/ Lien Q. Chen | ||
Name: Lien Q. Chen |
Re:
|
RAE Systems Inc. | |
Revised Preliminary Proxy Statement on Schedule 14A | ||
Filed December 14, 2010 | ||
File No. 001-31783 | ||
Amendment No. 2 to Schedule 13E-3 | ||
Filed December 14, 2010 | ||
File no. 005-58813 |
| the filing persons are responsible for the adequacy and accuracy of the disclosure in the filing; | ||
| staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and | ||
| the filing persons may not assert staff comments as a defense in any proceeding initiated by the Commission or any person uncle the federal securities laws at the United States. |
Sincerely yours, | ||
Robert I. Chen | ||
By: /s/ Robert I. Chen | ||
Name: Robert I. Chen |
Re:
|
RAE Systems Inc. | |
Revised Preliminary Proxy Statement on Schedule 14A | ||
Filed December 14, 2010 | ||
File No. 001-31783 | ||
Amendment No. 2 to Schedule 13E-3 | ||
Filed December 14, 2010 | ||
File no. 005-58813 |
| the filing persons are responsible for the adequacy and accuracy of the disclosure in the filing; | ||
| staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and | ||
| the filing persons may not assert staff comments as a defense in any proceeding initiated by the Commission or any person uncle the federal securities laws at the United States. |
Sincerely yours, | ||
Lien Q. Chen | ||
By: /s/ Lien Q. Chen | ||
Name: Lien Q. Chen |
Re:
|
RAE Systems Inc. | |
Revised Preliminary Proxy Statement on Schedule 14A | ||
Filed December 14, 2010 | ||
File No. 001-31783 | ||
Amendment No. 2 to Schedule 13E-3 | ||
Filed December 14, 2010 | ||
File no. 005-58813 |
| the filing persons are responsible for the adequacy and accuracy of the disclosure in the filing; | ||
| staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and | ||
| the filing persons may not assert staff comments as a defense in any proceeding initiated by the Commission or any person uncle the federal securities laws at the United States. |
Sincerely yours, | ||
Peter C. Hsi | ||
By: /s/ Peter C. Hsi | ||
Name: Peter C. Hsi |
Re:
|
RAE Systems Inc. | |
Revised Preliminary Proxy Statement on Schedule 14A | ||
Filed December 14, 2010 | ||
File No. 001-31783 | ||
Amendment No. 2 to Schedule 13E-3 | ||
Filed December 14, 2010 | ||
File no. 005-58813 |
| the filing persons are responsible for the adequacy and accuracy of the disclosure in the filing; | ||
| staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and | ||
| the filing persons may not assert staff comments as a defense in any proceeding initiated by the Commission or any person uncle the federal securities laws at the United States. |
Sincerely yours, | ||
Hsi Family Trust | ||
By: /s/ Peter C. Hsi | ||
Name: Peter C. Hsi | ||
Title: Trustee | ||
By: /s/Sandy Hsi | ||
Name: Sandy Hsi | ||
Title: Trustee |
RE: | RAE Systems Inc. |
| the filing persons are responsible for the adequacy and accuracy of the disclosure in the filing; |
| Staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and |
| the filing persons may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. |
By: | /s/ Morgan Jones |
Re: |
RAE Systems Inc. Revised Preliminary Proxy Statement on Schedule 14A Filed December 14, 2010 File No. 001-31783 Amendment No. 2 to Schedule 13E-3 Filed December 14, 2010 File No. 005-58813 |
| the filing persons are responsible for the adequacy and accuracy of the disclosure in the filing: | |
| Staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and | |
| the filing persons may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. |
By: |
/s/ Morgan
Jones
|
Re: | RAE Systems Inc. |
| the filing persons are responsible for the adequacy and accuracy of the disclosure in the filing; | |
| Staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and | |
| the filing persons may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. |
By: | /s/ Jesse Feldman |
Re: |
RAE Systems
Inc. Revised Preliminary Proxy Statement on Schedule 14A Filed December 14, 2010 File No. 001-31783 Amendment No. 2 to Schedule 13E-3 Filed December 14, 2010 File No. 005-58813 |
| the filing persons are responsible for the adequacy and accuracy of the disclosure in the filing; | |
| Staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and | |
| the filing persons may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. |
By: |
/s/ Jesse Feldman |