ML17269A342
| ML17269A342 | |
| Person / Time | |
|---|---|
| Site: | 03033699 |
| Issue date: | 09/14/2017 |
| From: | Koonce J W Bernhard Capital Partners Management LP |
| To: | Division of Nuclear Materials Safety IV |
| References | |
| 601094 | |
| Download: ML17269A342 (15) | |
Text
September 14, 2017 Division of Nuclear Materials Safety U.S. Nuclear Regulatory Commission, Region IV 1600 East Lamar Blvd. Arlington, TX 76011-4511 DNMS p R C Q I""\ ediate '.?el"dSO '"11'lal Rei NON-PUBLIC 0 A.3 Sen iti ;c Sr 1 I R .. ' :iLJ Q A.7 Scnsitiv" '.nt1"*
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SUBJECT:
Joint Application for Approval of Indirect Transfer of Control of: Materials Testing & Inspection, Inc. NRC Material License No. 11-27504-0l (Docket No. 030-33699) Consolidated Engineering Laboratories NRC Material License No. 04-29436-01 (Docket No. 030-38512) Pursuant to l 0 C.F.R. § 30.34(b ), Materials Testing & Inspection, Inc., an Idaho corporation ("MTI") and Quality Assurance Engineering, Inc., a California corporation doing business as "Consolidated Engineering Laboratories" ("CEL"), and Bernhard Capital Partners Management LP ("Bernhard Capital"), a Louisiana-based private equity firm (collectively, the "Applicants"), hereby request written approval by the U.S. Nuclear Regulatory Commission ("NRC") for the proposed indirect transfer of control of NRC Material Licenses Nos. 11-27504-01 and 04-29436-01 ("the Licenses"). MTI and CEL are the NRC licensees, and the parents of each company are owned by the majority of the same shareholders. The indirect transfer of control would occur upon the closing of a planned transaction (the "Closing") under which MTI and CEL would be indirectly acquired by Atlas Technical Consultants Intermediate Holdco LLC ("Atlas"), a subsidiary of investment funds managed by Bernhard Capital and its affiliates. 1 Attachment l provides more details about the transaction as well as further information about the basis for this request. Attachment 2 presents a simplified organizational chart describing the transaction. MTI and CEL would remain the NRC licensees post-Closing. The proposed transfer would not result in any planned changes to MTI's or CEL 's NRC-Iicensed activities or personnel responsible for such licensed activities. MTI and CEL intend to continue to have the same equipment, facilities, personnel and procedures needed to protect public health and safety and to secure the licensed material. Just prior to the Closing, MTI would convert its corporate form to a limited liability company. Promptly following the Closing, MTI would notify the NRC of the corporate form change so that the NRC can issue the conforming amendment to the MTI License to reflect the new name of the licensee as "Materials Testing & Inspection, LLC." 1 As is described in the attachments, certain employees of Atlas have an opportunity to own an interest in Atlas, and this will therefore include an indirect interest in MTI and CEL upon their acquisition by Atlas. The ownership interest in Atlas held by employees, however, will not result in any material ability to control the companies. lh601094 MTI is a leader in construction materials testing and inspection, geotechnical engineering, and environmental services. Its specialists include registered civil and geotechnical engineers and geologists, environmentalists, scientists, multi-disciplined materials testing and inspection technicians and inspectors, water and sewer operators, and project managers. As part of its business, it uses radioactive sealed sources for measuring the physical properties of materials. CEL has been providing engineering and materials testing services to the construction industry since 1976. With its depth of in-house resources and staffed with the finest materials engineers and fully certified field and laboratory staff, CEL can provide all engineering and quality assurance needs for any size project. As part of its businesses, it uses radioactive sealed sources for measuring the physical properties of materials. Bernhard Capital is a private equity firm based in Baton Rouge, Louisiana. It was founded by the former Chief Executive Officer of The Shaw Group, Jim Bernhard. The Shaw Group was a well-known construction company in the nuclear industry, and Mr. Bernhard is an experienced engineering and nuclear executive.2 Bernhard Capital is one of Louisiana's largest private equity investment funds, and is focused on opportunities in the energy sector. It has acquired a number of infrastructure, energy and environmental consulting companies as part of its investment strategy, including ATC Group Services LLC, which is an NRC licensee (e.g., Material License No. 13-17732-01). The Applicants expect the transaction to close promptly upon the receipt of the NRC license transfer approval. The Applicants therefore respectfully request the NRC' s expedited review and written approval of this planned license transfer by October 16, 2017, or sooner, if possible, to support the closing schedule. The Applicants further request that the NRC promptly post this application to its website for the 30-day comment period. If you have any questions or comments pertaining to this transaction, please contact Bernhard Capital's counsel for nuclear regulatory matters, Amy Roma, at Hogan Lovells US LLP (202-637-683 l/amy.roma@hoganlovells.com).
Enclosures:
Attachment 1, Application for Approval of Transfer of Control of NRC Material License Nos. 11-27504-01 and 04-29436-01 Attachment 2, Simplified Organizational Chart Describing the Transaction cc: Amy Roma, Hogan Lovells US LLP MTI Radiation Safety Officer CEL Radiation Safety Officer 2 Stephanie Riegel, Three Years After Leaving The Shaw Group, Jim Bernhard has Created a Private Equity Firm that Could Outgrow the Company he Sold for $3 Billion, GREATER BATON ROUGE BUSINESS REPORT (June 8, 2016), https://www.businessreport.com/business/three-years-leaving-shaw-group-jim-bernhard-created-private-equity-firmoutgrow-company-sold billion. 2 I declare under penalty of perjury under the Jaws of the United States of America that to the best of my knowledge the information contained in the Application for Approval of Indirect Transfer of Control ofNRC Material License Nos. 11-27504-01 and 04-29436-01 pertaining to Bernhard Capital Partners Management LP and its companies is true and correct. Executed on September 13, 2017. 'i . Jeffrey W. Koonce General Counsel Bernhard Capital Partners Management LP 400 Convention St. Baton Rouge, LA 70802 4 I declare under penalty of perjury under the Jaws of the United States of America that to the best of my knowledge the information contained in the Application for Approval of Indirect Transfer of Control of NRC Material License No. 04-29436-01 pertaining to Consolidated Engineering Laboratories is true and correct. Consolidated Engineering Laboratories 20 I Crow Canyon Road, Suite 100 San Ramon, CA 94583 I declare under penalty of perjury under the laws of the United States of America that to the best of my knowledge the infonnation contained in the Application for Approval of Indirect Transfer of Control of NRC Material License No. 11-27504-01 pertaining to Materials Testing & Inspections, Inc. is true and correct. Materials Testing & Inspections, Inc. 2791 South Victory Vievv Way Boise, Idaho 83 709 Application for Approval of Indirect Transfer of Control of NRC Material License Nos. Nos. 11-27504-01 and 04-29436-01 This information is submitted consistent with Chapter 5 (Change of Control) and Appendix E (Information Needed for Transfer of Control Application) of NUREG-1556, Vol. 15, Rev. 1, Consolidated Guidance About Materials Licenses: Guidance About Changes of Control and About Bankruptcy Involving Byproduct, Source, or Special Nuclear Materials Licenses. 1. Describe any planned changes in the organization, including but not limited to, transfer of stocks or assets and mergers, change in members on Board of Directors, etc. Provide the new licensee name, mailing address, and contact information, including phone numbers. Clearly identify when the amendment request is due to a name change only. Materials Testing & Inspection, Inc., an Idaho corporation ("MTI"), holds NRC Material License No. 11-27504-01. Quality Assurance Engineering, Inc., a California corporation doing business as "Consolidated Engineering Laboratories" ("CEL"), holds NRC Material License No. 04-29436-01 (collectively, "the Licenses"). The respective parent companies of the Licensees are currently owned by a majority of the same shareholders. The planned indirect transfer of control would occur upon the closing of a planned transaction (the "Closing") under which MTI and CEL would be indirectly acquired by Atlas Technical Consultants Intermediate Holdco LLC ("Atlas"), a subsidiary of investment funds managed by Bernhard Capital Partners Management LP ("Bernhard Capital"), a Louisiana-based private equity firm, and its affiliates (collectively, MTI, CEL, and Bernhard Capital are referred to herein as the "Applicants"). MTI & CEL will remain the NRC licensees following the Closing. Pursuant to the planned transaction, which will result in the indirect license transfer, prior to the Closing, MTI and CEL will undergo an internal reorganization in which a newly created intermediary company, ETS-ESC Holdings LLC, will become the indirect parent of both MTI and CEL for purposes of facilitating the transaction, among other things. The shareholders will then indirectly sell 100% of their interest in ETS-ESC Holdings LLC to Atlas at the Closing, resulting in the change of control. Following the Closing, MTI and CEL will remain the NRC licensees, but with Bernhard Capital indirectly owning the companies through Atlas.1 Attachment 2 presents a simplified organizational chart describing the transaction. Just prior to the Closing, MTI would convert its corporate form to a limited liability company. Promptly following the Closing, MTI would notify the NRC of the corporate form change so that the NRC can issue the conforming amendment to the MTI License to reflect the new name of the licensee as "Materials Testing & Inspection, LLC." The changes described above are the only changes expected from this transaction. Each company will remain in business at the same address and with the same Radiation Safety Officer listed in the Licenses. 1 Certain employees of Atlas have an opportunity to own an interest in Atlas, and this will therefore include an indirect interest in MT! and CEL upon their acquisition by Atlas. The ownership interest in Atlas held by employees, however, will not result in any material ability to control the companies. 1 tb.601094
- 2. Describe any changes in personnel or duties that relate to the licensed program. Include training and experience for new personnel and any changes in the training program. There are no planned changes in personnel or duties that relate to the licensed programs. 3. Describe any changes in the location, facilities, equipment, radiation safety program, use, possession, waste management, or other procedures that relate to the licensed program. There are no such changes planned in connection with the transaction. 4. Describe the status of the licensee's facilities, equipment, and radiation safety program, including any known contamination and whether decontamination will occur prior to transfer. Include the status of calibrations, leak tests, area surveys, wipe tests, training, quality control, and related records. The status of MTJ's and CEL's NRC-regulated equipment and radiation safety programs will not change in connection with the transaction. There is no known contamination. All calibrations, leak tests, area surveys, wipe tests, training, quality control, and related records are current. 5. If current decommissioning funding plans (DFP) will be changed as a result of the transfer, the revised DFP should be submitted. If other financial assurance documents will he changed as a result of the transfer, confirm that all financial assurance instruments associated with the license will be held in the transferee's name before the license is transferred, and as required by 10 CFR 30.35(/), the licensee must, within 30 days, submit financial instruments reflecting such changes. DFP or financial assurance instruments are not required under the Licenses. 6. Confirm that all records concerning the safe and effective decommissioning of the facility will be transferred to the transferee or to NRC, as appropriate. These records include documentation of surveys of ambient radiation levels and f1Xed and/or removable contamination, including methods and sensitivity. The Applicants confirm that such records will remain with MTI and CEL, that they are current, and that they will be current at the time of the transfer. 7. Confirm that both transferor and transferee agree to transferring control of the licensed material and activity, and the conditions of transfer, and that the transferee has been made aware of any open inspection items and its responsibility for possible resulting enforcement actions. The Applicants confirm that they have agreed to the change m control over MTI and CEL. There are no open inspection items pertaining to the Licenses. 2
- 8. Confirm that the tramferee will abide by all constraints, conditions, requirements, representations, and commitments of the tramferor or that the transferee will submit a complete description of the proposed licensed program. The NRC Licensees will not change as a result of this proposed transaction. In any event, the Licensees agree to abide by all constraints, conditions, requirements, representations and commitments identified in and attributed to the existing Licenses. 9. The transferee, in the case of fuel cycle facilities, shall provide documentation showing that it is financially qualified to conduct normal operations. The information can be in the form of income statements and balance sheet forecasts. This question is not applicable for these Licenses. 3 Simplified Organizational Chart Describing the Transaction
()) 0 -.... 0 co .t:::.. Simplified Organizational Chart Describing the Transaction PRE-TRANSFER ......**.....*.*.*..... . . .. ... M'.aterials Testing & Inspection, Inc. Consolidated Engineering Laboratories2 l The Current Shareholders are individuals. DAY-BEFORE CLOSING ETS-ESC Holdings LLC ........................ ,a . . . . Materials Testing & Inspection, LLC Consolidated Engineering Laboratories 1 "Quality Assurance Engineering, Inc.," doing business as "Consolidated Engineering Laboratories. 11 3 Passive investmemfunds managed by Bernhard Capital Partners Jfanagement LP and its affiliates. 4 Non-controlling interests held by employees of Atlas. AFTER CLOSING . . . . ***********************
- Atlas Technical Consultants Intermediate HoldcoLLC ETS-ESC Holdings LLC . . ..................... Materials Testing & Inspection, LLC Consolidated Engineering Laboratories * * * * * :> Indirect ownership -..,.;i).. Direct ownership Hill, Carol From: Cook, Jackie Sent: To: Thursday, September 14, 2017 12:56 PM Roma, Amy C. Cc: Desai, Sachin; Torres, RobertoJ; Hill, Carol
Subject:
RE: FW: Materials Testing & Inspection, Inc. & Consolidated Engineering Laboratories (NRC Material License Nos. 11-27504-01 and 04-29436-01) Request for Consent for the Indirect Transfer of Control Thank you Ms. Roma for the "heads-up"! So noted. From: Roma, Amy C. [1] Sent: Thursday, September 14, 2017 12:49 PM To: Cook, Jackie <Jackie.Cook@nrc.gov> Cc: Desai, Sachin <sachin.desai@hoganlovells.com>
Subject:
[External_Sender] FW: Materials Testing & Inspection, Inc. & Consolidated Engineering Laboratories (NRC Material License Nos. 11-27504-01 and 04-29436-01) Request for Consent for the Indirect Transfer of Control Hi Jackie, Sachin left you a voicemail earlier, but I just wanted to give you a heads up that this is a different application (for a different transaction) than the license transfer application for with Pave Tex that was submitted to the NRC at the beginning of September. It just happens to involve the same buyer, but the sellers/licensees are different. Thanks! Amy From: Roma, Amy C. Sent: Thursday, September 14, 2017 1:45 PM To: 'RidsRgn4MailCenter.Resource@nrc.gov' Cc: 'Jackie.Cook@nrc.gov'; 'RobertoJ.Torres@nrc.qov'; 'Lizette.Roldan@nrc.gov'; Desai, Sachin
Subject:
Materials Testing & Inspection, Inc. & Consolidated Engineering Laboratories (NRC Material License Nos. 11-27504-01 and 04-29436-01) Request for Consent for the Indirect Transfer of Control Good afternoon, Attached is an application seeking NRC consent for the indirect transfer of control of the two above-listed licenses. The parties respectfully request expedited review of this application, and NRC approval no later than October 16, 2017, or sooner if possible, to support the closing schedule. The parties also respectfully request that this application be promptly posted to the NRC's license transfer website to begin the 30-day comment period. A hardcopy of this application has also been sent to the NRC Region IV Division of Nuclear Materials Safety today via Fed Ex delivery. Please let me know if you have any questions. 1 Kind regards, Amy Roma Amy Roma Partner Hogan Lovells US LLP Columbia Square 555 Thirteenth Street, NW Washington, DC 20004 Tel: Direct: Mobile Fax: Email: +1 202 637 5600 +1 202 637 6831 +1 202 536 8229 +1 202 637 5910 amy.roma@hoganlovells.com www.hoganlovells.com Please consider the environment before printing this e-mail. About Hogan Lovells Hogan Lovells is an international legal practice that includes Hogan Lovells US LLP and Hogan Lovells International LLP. For more information, see www.hoganlovells.com. CONFIDENTIALITY. This email and any attachments are confidential, except where the email states it can be disclosed; it may also be privileged. If received in error, please do not disclose the contents to anyone, but notify the sender by return email and delete this email (and any attachments) from your system. 2 601094 NRC FORM 532 U.S. NUCLEAR REGULATORY COMMISSION (05-2016) llEau<-f>o -ACKNOWLEDGEMENT -RECEIPT OF CORRESPONDENCE <. +.., °"o ....... Name and Address of Applicant and/or Licensee Date I 09/26/2017 I License Number{s) Mr. Brandon Huff I 11-27504-01 I Radiation Safety Officer Mail Control Number{s) Materials Testing & Inspection, Inc. I 601094 I 2791 South Victory View Way Licensing and/or Technical Reviewer or Branch Boise, Idaho 83709 CHill This is to acknowledge receipt of your: 0 Letter and/or D Application Dated: 09/14/2017 The initial processing, which included an administrative review, has been performed. 0 Amendment D Termination D New License D Renewal D There were no administrative omissions identified during our initial review. D This is to acknowledge receipt of your application for renewal of the material(s) license identified above. Your application is deemed timely filed, and accordingly, the license will not expire until final action has been taken by this office. D Your application for a new NRC license did not include your taxpayer identification number. Please complete and submit NRC Form 531, Request for Taxpayer Identification Number, located at the following link: http://www.nrc.gov/readin_g-rm/doc-collections/forms/nrc531.pdf Follow the instructions on the form for submission. D The following administrative omissions have been identified: Your application has been assigned the above listed MAIL CONTROL NUMBER. When calling to inquire about this action, please refer to this control number. Your application has been forwarded to a technical reviewer. Please note that the technical review, which is normally completed within 180 days for a renewal application (90 days for all other requests), may identify additional omissions or require additional information. If you have any questions concerning the processing of your application, our contact information is listed below: Region IV U. S. Nuclear Regulatory Commission DNMS/NMSB -B 1600 E. Lamar Boulevard Arlington, TX 76011-4511 (817) 200-1209 or (817) 200-1140 BETWEEN: Accounts Receivable/Payable and Regional Licensing Branches [ FOR ARPB USE ] INFORMATION FROM WBL Program Code: 03121 Status Code: Pending Amendment Fee Category:3P Exp. Date: 07/31/2025 Fee Comments: Decom Fin Assur Reqd: N License Fee Worksheet -License Fee Transmittal -A. REGION 1. APPLICATION ATTACHED ApplicanULicensee: Materials Testing & Inspection, Inc. Received Date: 09/15/2017 Docket Number: 3033699 Mail Control Number: 601094 License Number: 11-27504-01 Action Type: Amendment 2. FEE ATTACHED Amount: Check No.: 3. COMMENTS Signed: Date: B. LICENSE FEE MANAGEMENT BRANCH (Check when milestone 03 is entered 1. Fee Category and Amount: 2. Correct Fee Paid. Application may be processed for: Amendment: Renewal: License: Signed: Date: