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UNITED STATES OF AMERICA
 

BEFORE THE FEDERAL TRAE COMMISSION
 

In the Matter of )
 

) 

) Docket No. 9327 

POL YlORE INTERNATIONAL, INC., )
 

a corporation ) 

) 

THIRD PARTY W ARURG PINCUS LLC'S 

MOTION FOR IN CAMERA TREATMENT OF MATERIAL
 

PREVIOUSLY DESIGNATED AS CONFIDENTIA
 
Exhibit No. Date 

PX073 8 10/4/2007 

PX0745 2/25/2004 

PX0746 5/14/2004 

PX0751 6/16/2006 

PX0977 4/00/2006 

PX0980 1/00/2004 

PX0984 6/30/2006 

PX1715 2/27/2007 

PX1719 2/26/2007 

PX1726 3/31/2007 

PX1727 1/00/2004 

PXl731 5/12/2004 

RX0907 9/27/2007 

II. Legal Standard
 

Page No(s). 

4-17 

1-3 

1-10 

1 

7,10, 14, 16-26,28-84 

1-36
 

1-4
 

2-3
 

2-3
 

1-5
 

3-6,10,12-14,18-20,22,24,32
 

1-9
 

1-3
 

The Proposed Exhibits listed above warrant in camera treatment as provided by 16 

C.F.R. § 3.45(b). Under this section, requests for in camera treatment must demonstrate that 

public disclosure of 
 the document in question "will result in a clearly defined, serious injury to 

the person or corporation whose records are involved." HP. Hood & Sons, Inc., 58 F.T.C. 1184, 

1188 (1961). That showing can be made by establishing that the document is "sufficiently secret 

and sufficiently material to the applicant's business that disclosure would result in serious 

competitive injury." In re Gen. Foods Corp., 95 F.T.C. 352, 355 (1980).
 

The Commission considers the following six factors in determining whether an in camera 

applicant has made a sufficient showing: 

(1) the extent to which the information is known outside the applicant's business;
 

(2) the extent to which the information is known by employees and others involved in
 

the applicant's business; 

measures taken by the applicant to guard the secrecy ofthe 

information; 

(3) the extent of 


(4) the value ofthe information to the applicant and its competitors;
 

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(5) the amount of effort or money expended by the party in developing the
 

information; and 

(6) the ease of diffculty with which the information could be properly acquired or
 

duplicated by others. Bristol-Meyers Co., 90 F.T.C. 455,456 (1977). 

Administrative law judges have broad discretion in applying these factors to determine 

whether infonnation warrants in camera treatment. See In re Gen. Foods Corp., 95 F.T.C. at 

353. Moreover, as a policy matter, extensions of confidential or in camera treatment in 

appropriate cases involving third parties is important as it encourages cooperation with future 

adjudicative discovery requests. Kaiser Aluminum & Chem. Corp., 103 F.T.C. 500, 500 (1984). 

III. The Proposed Exhibits Meet the Legal Standard for In Camera Treatment Because
 

Their Public Disclosure Would Result in a Clearly Defined, Serious In,jury to 

Warburg Pincus. 

A. The Proposed Exhibits Would Harm Warburg Pincus by Enabling Other
 

Market Participants to Gain an Advantage in Current or Future 

Negotiations. 

The Proposed Exhibits hold the keys to Warburg Pincus' proprietary process for 

selecting, valuing, and managing its portfolio companies. Research, analysis, and management 

of portfolio investments are the essence of Warburg Pincus' revenue-generating activity. The 

significance of War burg Pincus' methodology is not likely to diminish in the foreseeable future. 

Disclosure of 
 this infonnation would inflict serious injury upon Warburg Pincus by enabling, for 

instance, a rival private equity finn to replicate Warburg Pincus' process or a potential portfolio 

company to gain an advantage versus Warburg Pincus in future negotiations. 

The following Warburg Pincus documents warrant in camera treatment because they 

represent significant work product that Warburg Pincus has compiled at great expense and has 

not made available to either the general public or employees of Polypore or Warburg Pincus, 

other than investment professionals. Warburg Pincus consistently executes non-disclosure 

agreements before commencing the due diligence process with a potential portfolio company. 

The sheer complexity of War burg Pincus' methodology means that it is not easily predicted, 

deconstructed, or replicated by competitors or others in the marketplace. Disclosure of the work 

product reflected in the Proposed Exhibits would wrongly enable other market participants to 

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benefit from Warburg Pincus' labors. In re Gen. Foods, 1980 FTC LEXIS 99, at *7-8 (Mar. 10, 

1980); Bristol-Meyers Co., 90 F.T.C. at 456. 

The most sensitive of 
 these documents, for example, explains Warburg Pincus' highly 

proprietary method for valuing its investments, known as "Grills" analysis. For example, pages 

(REDACTED) reveal: the rates ofretum Warburg Pincus requires before making, sustaining, or 

exiting an investment; the range of eamings multipliers Warburg Pincus uses to project the 

potential future value of an investment in a given industry sector, such as chemical companies; 

and an explanation of the assumptions Warburg Pincus uses in this methodology. Warburg 

Pincus considers this methodology crucial to its current and future business and would be put at a 

great disadvantage should it be discovered by any of its competitors, current or potential 

portfolio companies, or their customers. 

Several documents, read in their entirety, reveal the specific framework and template that 

Warburg Pincus applies in its analysis of portfolio companies. Accordingly, the entirety of each 

of these documents merits in camera treatment. In the altemative, Warburg Pincus requests in

camera treatment of 
 these documents according to the categories of content listed below: 

o Warburg Pincus' Valuation and Value-Creation Methods: Disclosure of the 

following pages could give a competing private equity firm the keys to how Warburg 

Pincus: 1) develops and implements its strategic plans to grow its investment in a 

portfolio company; and 2) estimates its rate of retum on investment. Disclosure of this 

infonnation could expose methods that are central to Warburg Pincus' core business: 

(REDACTED) 

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· Warburg Pincus' Due Dilgence Approach: The following pages explain Warburg 

Pincus' methodology for conducting due diligence before making an investment, 

including its areas of 
 focus and which diligence milestones it must reach before 

proceeding with various steps towards closing a transaction. Disclosure of this 

information could enable a competitor of Warburg Pincus to replicate its processes. 

Similarly, disclosure could enable a current or potential portfolio company to gain undue 

leverage versus Warburg in future negotiations. Pages containing this sensitive 

infoimation include: (REDACTED). 

· Warburg Pincus' Risk Assessments: The following pages contain information 

reflecting Warburg Pincus' articulation of any risks it perceives to Polypore's business. 

Because the public capital markets could receive these comments as negative remarks by 

Polypore's owner, their disclosure could cause unnecessary unease among holders of 

publicly-traded Polypore stock. Pages containing this sensitive information include: 

(REDACTED) 

· Investment Professionals' Analysis and Management: Several pages disclose specific 

information of ongoing relevance regarding how Warburg Pincus structures and deploys 

teams from its various worldwide offices to evaluate and manage investment 

opportunities. Pages containing sensitive infonnation include: (REDACTED) 

B. Other Proposed Exhibits Would Harm Warburg Pincus by Exposing
 

Polypore's Competitively-Sensitive Information. 

As the owner of 47.8% of Polyp ore shares, Warburg Pincus would suffer significant 

injury upon disclosure of the competitively-sensitive information contained in the Proposed 

- 5 ­
Exhibits. Accordingly, Warburg Pincus requests in camera treatment of the documents and 

pages listed below. 

. Customer Information: The following pages reflect extremely sensitive information 

about Polypore's relationships with its customers. Disclosure of this information could 

enable current and potential customers to gain undue leverage against Polypore in future 

negotiations. In addition, this information would be highly valuable to Polypore's 

competitors. Pages containing this sensitive information include: 

(REDACTED)
 

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· Polyp 
 ore Strategic Plans: The following pages reflect Polypore's strategic plans for 

expansion. The following pages contain competitively-sensitive information: 

(REDACTED). 

· Detailed Nonpublic Financial Data: The following pages supply nonpublic pricing and
 

financial information as recent as 2006 by product line, providing such granular details as
 

sales volume of a specific product to a specific sector: (REDACTED).
 

Polypore does not, and has no plans to, release such financial information to the public,
 

especially on such a granular leveL.
 

· Competitive Intellgence: Several pages reveal the analysis and assumptions of 

Warburg Pincus and Polypore regarding Polypore's competitive landscape. Discovery 
 of 

these assumptions could be used by Polypore's competitors or others to gain an 

advantage over Polypore. Pages containing this sensitive information include: 

(REDACTED). 

IV. Conclusion
 

In camera treatment of 
 the Proposed Exhibits is appropriate for the reasons outlined 

above. Third Party Warburg Pincus requests that the Proposed Exhibits receive in camera 

treatment. 

Dated: April 9,2009 

Respectfully Submitted, 

~ AÂ A
 

Bemard A. Nigro, Jr. 

WILLKIE F ARR & GALLAG 

1875 K Street, NW 

Washington, DC 20006 

Telephone: 202-303-1125 

Facsimile: 202-303-2125 

Elizabeth S. Boison 

WILLKIE FARR & GALLAGHER LLP 

1875 K Street, NW 

Washingtoii, DC 20006 

Telephone: 202-303-1266 

Facsimile: 202-303-2266 

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COUNSEL FOR THIRD PARTY 

W ARBURG PINCUS LLC 

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CERTIFICATE OF SERVICE 

I, Bemard A. Nigro, Jr., hereby certify that on April 9, 2009, true and correct copies of 

the foregoing Third Party Warburg Pincus LLC's Motion For In Camera Treatment of 
 Material 

Previously Designated As Confìdential were served as follows: 

One original and two copies served by hand delivery upon: 

Office of the Secretary 

Federal Trade Commission 

Room H135
 

600 Pennsylvania Avenue, N.W. 

Washington, D.C. 20580 

Two copies (by first class mail and email) and the documents for which Warburg Pincus LLC 

seeks in camera treatment (by first class mail) upon: 

The Honorable D. Michael Chappell 

Administrative Law Judge 

Federal Trade Commission 

600 Pennsylvania Avenue, N.W., H-l06 

Washington, D.C. 20580 

One copy served by first class mail and email to each: 

William L. Rikard, Jr., Esq. 

Eric D. Welsh, Esq. 

Parker, Poe, Adams & Bemstein, LLP 

Three Wachovia Center 

401 South Tryon Street, Suite 3000 

Charlotte, NC 28202 

wiliamrikard(cparkerpoe. com 

eri cwelsh~parkerpoe. com 

J. Robert Robertson, Esq. 

Steven A. Dahm, Esq. 

Federal Trade Commission 

600 Pennsylvania Avenue, N.W. 

Washington, D.C. 20580 

ITobertson(cftc.gov 

sdahm(iù,ftc. gov 
UNITED STATES OF AMERICA
 

BEFORE THE FEDERAL TRADE COMMISSION
 

In the Matter of )
 

)
 

9237 )
 Docket No. 

POLYPORE INTERNATIONAL, INC., )
 

a corporation ) 

) 

(PROPOSED) ORDER GRANTING
 

THIRD PARTY W ARBURG PINCUS LLC'S
 

MOTION FOR IN CAMERA TREATMENT OF MATERIAL
 

PREVIOUSL Y DESIGNATED AS CONFIDENTIAL
 

Pursuant to Commission Rule 3.45(b), Third Party Warburg Pincus LLC ("Warburg 

Pincus") has fied a Motion for In camera Treatment of Material Previously Designated as 

Confidential ("Warburg Pincus' Motion"). It is hereby ordered that Warburg Pincus' Motion is 

GRANTED for a period of three years for the documents listed below: 

Exhibit No. Date Page No(s).
 

PX0738 10/4/2007 4-17
 

PX0745 2/25/2004 1-3
 

PX0746 5/14/2004 1-10
 

PX0751 6/16/2006 1
 

PX0977 4/00/2006 7,10,14,16-26,28-84
 

PX0980 1/00/2004 1-36
 

PX0984 6/30/2006 1-4
 

PX 1715 2/27/2007 2-3
 

PX1719 2/26/2007 2-3
 

PXl726 3/31/2007 1-5
 

PXl727 1/00/2004 3-6,10,12-14,18-20,22,24,32
 

PX1731 5/12/2004 1-9
 

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RX0907 19/27/20071 1-3
 

ORDERED: 

D. Michael Chappell 

Administrative Law Judge 

Date: ,2009 

- 11 ­
UNITED STATES OF AMERICA
 

BEFORE THE FEDERAL TRADE COMMISSION
 

In the Matter of )
 

) 

) Docket No. 9237

POL YPORE INTERNATIONAL, INC., )
 

a corporation ) 

) 

DECLARATION OF MICHAEL GRAFF 

1. I am a Member and Managing Director of Warburg Pincus LLC ("Warburg Pincus")
 

and Chairman ofthe Board of Polyp ore Intemational, Inc. ("Polypore"). 

2. Warburg Pincus currently owns 47.8% of Polyp ore, as of March 12,2009. 

3. On or about May 9,16 and 23, 2008, Warburg Pincus produced documents pursuant
 

to a Federal Trade Commission ("FTC") Civil Investigative Demand issued in the 

above-captioned matter. Warburg Pincus designated these documents "Confidential" 

pursuant to a Protective Order Goveming Discovery Material dated October 23,2008 

("Protective Order"). 

4. Warburg Pincus designated these documents as "Confidential" because they contain, 

among other things, proprietary financial data and projections as well as proprietary 

market research and analyses applicable to current or future market conditions. 

5. No party at any point challenged Warburg Pincus' "Confidential" designation of
 

materials produced in this action. 

6. Warburg Pincus produced these documents with the understanding that Warburg 

Pincus would have the opportunity to prevent the public release of these documents 

should they be used in any future administrative proceeding. 

7. I understand that Complaint and Respondent's Counsel have proposed to use a subset
 

of these documents as exhibits ("Proposed Exhibits") in an upcoming proceeding 

before the FTC. 

8. The Proposed Exhibits also contain Warburg Pincus' proprietary methodology for
 

valuing its investments that is not available to the general public. Research, analysis, 

and management of portfolio investments are the essence of War burg Pincus' 
revenue-generating activity. The significance of War burg Pincus' methodology is not 

likely to diminish in the foreseeable future. Disclosure of this information, including 

Warburg Pincus' approach to investigating and analyzing investments, would inflict 

serious injury upon Warburg Pincus by enabling, for instance, a rival private equity 

firm to replicate Warburg Pincus' process or a potential portfolio company or one of 

its customers to gain an advantage versus Warburg Pincus in future negotiations. 

9. The Proposed Exhibits, if disclosed, would release to the public the details of how 

Warburg Pincus analyzes portfolio companies and decides when to invest and when 

to liquidate its investment. These specific details including, for example, the rates of 

retum Warburg Pincus requires before making, sustaining, or exiting an investment; 

the range of eamings multipliers Warburg Pincus uses to project the potential future 

value of an investment in a given industry sector; and an explanation of the 

assumptions Warburg Pincus uses in this analysis. 

10. The Proposed Exhibits contain highly confidential and extremely sensitive business
 

infonnation about Polypore, including information about its strategic growth plans, 

revenue sources, competitive intelligence, and important aspects of Polyp ore's 

rclations with other businesses, including customers. 

11. Neither the Proposed Exhibits nor the information they contain has been made
 

available to either the general public or employees of Polyp ore. 

12. Warburg Pincus and Polypore have taken, and continue to take, the following steps to 

safeguard the confidential nature of the Proposed Exhibits and the information they 

contain: 

a. Execution of confidentiality and non-disclosure agreements; and
 

b. Designation ofthe Proposed Exhibits as "Confidential" before producing
 

them in the above-captioned action with the understanding that they would be 

disclosed only to the limited parties listed in paragraph 9 of the Protective 

Order. 

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13. Warburg Pincus has invested significant time and money sÍnce its inception 

developing its proprietar methodology for selecting, valuing, and managing Íts 

portfolio companies. 

14. Making available to the public the highly confidential information contained in the 

Proposed Exhibits wOlÙd result in serious competitive har to Polypore and Warburg 

Pincus. 

I declare under penalty of perjur under the laws of the United States of 
 America that the

foregoing is true and correct. 

Executed on April 9, 2009 

I

i

l 

Michael Graff
 

Member and Managing Director, Warburg Pincus LLC 

Chainnan of 
 the Board, 

Po1ypore International, Incorporated 

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