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United States securities and exchange commission logo
July 27, 2022
Maria Reda
General Counsel
Steel Connect, Inc.
200 Midway Lane
Smyrna, TN 37167
Re: Steel Connect, Inc.
Schedule 13E-3
filed July 8, 2022
SEC File No.
5-43347
Filed by Steel
Partners Holdings, LP et al.
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Schedule 14A filed
July 8, 2022
SEC File No.
1-35319
Dear Ms. Reda:
We have reviewed your filing and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments by providing the requested
information or advise us as
soon as possible when you will respond. If you do not believe our
comments apply to your facts
and circumstances, please tell us why in your response.
After reviewing your response to these comments, we may have
additional comments.
All defined terms used here have the same meaning as in your proxy
statement.
Schedule 13E-3 filed July 8, 2022
General
1. Houlihan Lokey provided
multiple sets of written materials to the Special Committee, as
reflected in Exhibits
(c)(2)-(8). Only the last presentation dated June 12, 2022 is
summarized in any level
of detail in the proxy statement. Please expand the summary of
the other presentation
materials on pages 40-41 of the proxy statement. To the extent that
they are duplicative of
one another, only the differences may be described. See Item 9 of
Schedule 13E-3 and Item
1015(b)(6) of Regulation M-A.
2. Item 1015(a) of
Regulation M-A and Item 9 of Schedule 13E-3 require a filing party to
state whether or not it
received a report or opinion or appraisal materially related to the
Maria Reda
FirstName LastNameMaria Reda
Steel Connect, Inc.
Comapany
July NameSteel Connect, Inc.
27, 2022
July 27,
Page 2 2022 Page 2
FirstName LastName
going private transaction. While the Background section in the proxy
statement identifies
Imperial Capital as Parent's financial advisor, and Imperial Capital
participated in the
negotiation of the Merger on behalf of the Parent Group, there is no
summary of any oral
presentation or written materials provided. Please revise to include
the disclosure required
by Item 1015(a) and (b) (to the extent applicable). Note that Item 9
and Item 1015(b)
encompasses both oral and written relevant "reports" and presentations
by a financial
advisor to its client.
Schedule 14A filed July 8, 2022
Interests of Steel Connect's Directors and Executive Officers in the Merger,
page 5
3. Here and in the corresponding section on page 53 of the preliminary
proxy statement,
clarify that certain directors will retain an equity interest
(directly or indirectly) in the
surviving entity after the Merger. Your revised disclosure should
quantify their equity
stake going forward.
Reasons for the Merger..., page 26
4. State, if accurate, that the Special Committee was not empowered to
seek alternate
transactions or engage in discussions or negotiations relating to an
alternative transaction.
5. In each place in the proxy statement where you describe factors
considered by filing
parties in assessing the fairness of the Merger to unaffiliated
shareholders, revise to be
clear that you have described all material factors considered. See for
example, the
disclosure on page 27, second full paragraph: "[T]he Special Committee
and the Board
considered, among other things, the following potentially positive
factors, which are not
intended to be exhaustive..."
6. See our last comment. On page 34, the disclosure states that the
Special Committee and
the Board "reached the decision to approve the entry into the Merger
Agreement and
recommended its adoption by the Company's stockholders in light of the
factors described
above and other factors that the Special Committee and the Board
beleved were
appropriate." All material factors considered by the Special Committee
and the Board
should be described.
Opinion of Houlihan Lokey Capital Inc. Financial Advisor to the Special
Committee, page 34
7. Refer to the following statement on page 36: "Houlihan Lokey's opinion
was furnished
for the use of the Special Committee (in its capacity as such) in
connection with its
evaluation of the Merger and may not be used for any other purposes
without Houlihan
Lokey's prior written consent." We also note similar language in the
Houlihan Lokey
opinion attached as Annex B to the proxy statement. Revise to state
that Houlihan Lokey
has provided consent to use its opinion in the proxy statement.
8. On page 38, revise to briefly explain how Houlihan Lokey selected the
comparable
companies, rather than just stating that it "deemed them relevant."
Provide comparable
Maria Reda
Steel Connect, Inc.
July 27, 2022
Page 3
disclosure for the selected transactions identified on page 39.
The Parent Group Members' Purposes and Reasons for the Merger, page 42
9. Revise to state why Parent Group Members are seeking to purchase the
Company, and
why they are trying to do so now. See Item 1013(c) of Regulation M-A.
Rather than
stating that they are doing so to acquire all of the shares of the
Company not already
owned by them, explain why they wish to do so, and why now.
Projected Financial Information, page 48
10. Revise to summarize the underlying assumptions and limitations on the
projected financial
information. See for example, the discussion in Overview of Financial
Projections in
Exhibit (c)(8) to the Schedule 13E-3.
Proposal No. 2: The Amendment Proposal, page 97
11. We note the disclosure here that approval of the Amendment Proposal is
not a condition to
the completion of the Merger. Explain what will happen if this proposal
does not pass but
the Merger is approved. Clarify whether this would mean that the Merger
would
constitute a Liquidation Event as defined in your proxy materials, and
what the impact
would be.
We remind you that the filing persons are responsible for the accuracy
and adequacy of
their disclosures, notwithstanding any review, comments, action or absence of
action by the staff.
Please direct any questions to Christina Chalk, Senior Special Counsel,
at (202) 551-
3263.
Sincerely,
FirstName LastNameMaria Reda
Division of
Corporation Finance
Comapany NameSteel Connect, Inc.
Office of Mergers
& Acquisitions
July 27, 2022 Page 3
cc: Colin Diamond, Esq.
FirstName LastName