If your growth plan includes buying a competitor, a supplier, or a smaller company in your industry, there's a federal filing requirement that can trip you up long before you ever worry about "antitrust" in the traditional sense — and in July 2026, the Federal Trade Commission just made an example out of two companies that tried to get creative about avoiding it.
On July 13, 2026, the FTC and Department of Justice announced a $12 million settlement with Edwards Lifesciences Corporation and Genesis MedTech Group — the largest civil penalty either agency has ever obtained for failing to file under the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act). Edwards will pay $10 million and Genesis will pay $2 million. The case is a useful reminder that the government doesn't just care about mergers that create monopolies — it cares just as much about whether you told them about the deal in the first place.
You don't have to be a medical device giant for this to matter. Any business that grows by acquisition — buying out a smaller competitor, rolling up multiple locations, or picking up a supplier — needs to understand where the HSR trip wire sits, because the penalties for missing it are severe, strict, and completely unrelated to whether the deal itself was actually anticompetitive.
What Actually Happened
Edwards Lifesciences is a large medical device company that makes heart valve technology. In July 2024, Edwards agreed to acquire JC Medical, a competitor, for $115 million. At the same time, Edwards made a $25 million investment in Genesis MedTech, JC Medical's parent company.
Here's the problem, according to the FTC: at the time, the HSR filing threshold was $119.5 million. Structure the JC Medical deal at $115 million in voting securities, and it falls just under the line — no filing required, no 30-day waiting period, no advance disclosure to antitrust regulators. The FTC alleged that the $25 million side investment was deliberately routed into non-voting securities specifically so it wouldn't count toward the JC Medical transaction value, keeping the reportable number below the threshold.
Then, just one day after closing the JC Medical deal, Edwards moved to acquire JenaValve Technology — JC Medical's only real competitor. That second deal did get FTC scrutiny, and in January 2026 a federal court granted the FTC's request to block it as anticompetitive. It was during that JenaValve investigation that regulators discovered how the earlier JC Medical/Genesis transaction had been structured, and the failure-to-file case was born.
The lesson buried in the case: allocating purchase price to non-voting securities isn't inherently illegal — companies do it for legitimate tax and structuring reasons all the time. What sank Edwards and Genesis was that regulators found the purpose of the allocation was to duck the filing requirement. Intent matters, and it's discoverable after the fact, often years later, once a related deal puts your earlier one under a microscope.
What the HSR Act Actually Requires
The HSR Act requires companies to notify the FTC and DOJ before closing certain mergers and acquisitions, then wait out a review period (typically 30 days) before the deal can close. It exists so regulators can catch anticompetitive combinations before they happen, rather than trying to unwind them afterward.
Whether a deal is reportable comes down to two tests:
- Size of transaction. For 2026, the threshold is $133.9 million. Deals below that generally don't need to be reported at all, regardless of who's involved.
- Size of person. For transactions between $133.9 million and $535.5 million, a filing is only required if one party has at least $267.8 million in annual net sales or total assets, and the other has at least $26.8 million. Above $535.5 million, a filing is required regardless of party size.
These thresholds adjust every year based on gross national product changes, and they went into effect for any deal closing on or after February 17, 2026. If you're planning an acquisition, check the current-year numbers — don't rely on a figure you remember from a prior year's deal.
Filing fees themselves aren't trivial either: for 2026 they range from $35,000 up to $2.46 million, scaled to the size of the transaction. That's before you even get to what happens if you should have filed and didn't.
Why This Matters Even If You're Nowhere Near Edwards Lifesciences' Size
Most small and mid-sized businesses will never get near a nine-figure acquisition. But three groups of smaller companies run into HSR risk more often than they expect:
Serial acquirers and roll-ups. If your growth strategy is buying up several smaller competitors over a few years — a common playbook in home services, dental practices, veterinary clinics, and similar fragmented industries — individual deals might each be small, but the size of person test looks at your company's total assets and revenue, not just the deal size. A well-capitalized roll-up buyer can trigger a filing obligation on an acquisition that looks modest in isolation.
Private-equity-backed platforms. If you've taken PE investment and your platform company is now making add-on acquisitions, the size-of-person calculation typically includes the PE fund's broader holdings, not just your standalone balance sheet. Founders are sometimes surprised to learn that a deal they thought was clearly too small to matter is reportable because of who's backing them.
Anyone structuring a deal to "just miss" a threshold. This is the exact fact pattern in the Edwards case, and it's tempting: if your deal is $122 million and the threshold is $119.5 million, restructuring part of the consideration to land at $118 million feels like smart deal-making. The FTC's position, reinforced by this settlement, is that doing this for the purpose of avoiding the filing is itself the violation — separate from whatever penalties would apply to the underlying deal.
It's also worth knowing that federal HSR isn't the only regime. California, Colorado, and Washington all have their own "mini-HSR" merger notification laws with separate filing triggers and their own escalating daily penalties for noncompliance. A deal too small for federal review can still require a state filing if it touches one of those states.
What to Do Before You Sign
If an acquisition is anywhere in your near-term plans — even an informal conversation with a competitor about "maybe combining forces" — a few habits keep you out of this exact trap:
- Run the size-of-transaction and size-of-person numbers early, using the current year's thresholds, not last year's. Do this as soon as a deal has a real price tag, not the week before closing.
- Loop in counsel with HSR experience before the purchase agreement is drafted, not after. Structuring decisions that affect valuation — earnouts, non-voting securities, side investments, seller notes — all interact with the reportable transaction value, and getting the sequence backward is how companies end up litigating intent months or years later.
- Sellers should scrutinize deal structure too. The FTC's guidance is explicit that sellers can't just point to the buyer's representations if they went along with a structure designed to dodge a filing, particularly if the seller entity survives the deal.
- Keep clean records of how a valuation was reached. If a regulator ever asks why a deal was priced or structured the way it was, "our accountant's spreadsheet from 18 months ago that nobody can reconstruct" is not the answer you want to give. You want the actual numbers, the actual allocation between voting and non-voting consideration, and a clear record of when and why each piece was decided.
That last point is where bookkeeping stops being a back-office chore and starts being deal-closing infrastructure. A business that can hand its counsel a clean, auditable history of every transaction, valuation, and capital allocation — rather than reconstructing it from memory during an FTC inquiry — is in a dramatically stronger position than one that can't.
Keep Your Financial Records Audit-Ready
Deal structuring decisions live and die by the numbers behind them, and if you can't produce a clear, dated record of how a valuation or allocation was reached, you're exposed well beyond the deal itself. Beancount.io offers plain-text accounting that gives you a fully version-controlled, auditable history of every transaction — the kind of transparent record that holds up whether you're facing a lender's due diligence, a buyer's term sheet, or a regulator's questions. Get started for free and keep your books ready for whatever comes next.