Definition of HCE when plan sponsor acquires an existing business.

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My client acquired 100% of stock of a competitor. The transaction closed 1/4/1999. All eligible employees of acquired firm were let into my client's plan.

For purposes of defining HCE for 1999 plan year (which is calendar), is former owner of acquired business an HCE due to ownership interest or compensation (well in excess of $80,000 in 1998) from acquired firm?