Case studies

"Because of the pure breadth and depth of black letter law research and practical guidance that LexisNexis provides, we don't have to rely on counsel as much as perhaps firms that don't use LexisNexis."

KaurMaxwell

Access all 45 documents on Equity financing

GET ACCESS NOW

GLOSSARY

Equity financing definition

Published by a LexisNexis Corporate expert

What does Equity financing mean?

Companies seeking to raise finance may use equity financing instead of or in addition to debt financing. To raise equity finance, a company creates new ordinary shares and sells them for cash. The new share owners become part-owners of the company and share in the risks and rewards of the company’s business.

Speed up all aspects of your legal work with tools that help you to work faster and smarter. Win cases, close deals and grow your business–all whilst saving time and reducing risk.

Private equity MBO—list of key documents—checklist

Private equity MBO—list of key documents—checklist The key documents for a private equity-backed management or leveraged buyout transaction can be separated into three broad categories: • Acquisition documents—these govern the terms of the acquisition between the seller and the purchaser (ie newco) • Equity documents—these govern the terms of the equity investment and the relationship between the investor/s and management, and • Finance documents—these govern the provision of the debt facilities and any related facilities (such as a revolving credit facility for working capital) Acquisition documents Heads of terms (acquisition) Heads of terms set out, in a short document, a broad outline of the parties' expectations, understanding and agreement of the key terms of the proposed acquisition.Heads will be signed at the beginning of the transaction as soon as the parties agree key terms and before the investor incurs costs in conducting its due diligence and negotiating the transaction documents. Practice Note: Heads of terms—share and asset purchases Precedents: Heads of terms—private M&A—share purchase and Heads of terms—private M&A—asset...

Discover our 1 Checklists on Equity financing

Drafting and negotiating the articles of association in a private equity buyout transaction

Drafting and negotiating the articles of association in a private equity buyout transaction This Practice Note is part of the Lexis+® UK Corporate Private equity buyout transaction collection. Drafting the articles The private equity investor's lawyers will generally prepare the first draft of the articles of association (Articles). Which precedent agreement to use When looking for a suitable Precedent, the main factor relevant to the choice of Precedent is whether you choose a single investor or multiple investors version (the latter appropriate where there is a syndicate of investors). For a guide to certain key matters to be considered when drafting and/or reviewing the Articles, see Practice Note: A guide to drafting articles of association for a buyout transaction. For a general overview of what the equity terms may be and other relevant issues, see Practice Notes: • Private equity financing—equity • Understanding share capital • Class rights and variation of class rights • Allotment and issue of shares—introductory points • Unfair prejudice claims—fundamentals • Derivative...

Private equity investment—preliminary matters

Private equity investment—preliminary matters The preliminary matters to be addressed before a proposed private equity investment proceeds to the transaction execution stage are generally the same whether the category of investment is venture capital, management buyout or buy-in, or development capital. Information about the business Once the decision to sell or seek private equity investment has been reached a document setting out detailed information about the business and the desire for investment will need to be prepared. In the context of a venture capital or development capital investment, this document is usually in the form of a business plan prepared by management, as is the case for a buyout or buy-in where the investor or buyer has already been identified. In the case of an auction process (where the investor or buyer has not yet been identified), the document will usually take the form of an information memorandum (IM). See Precedent: Information Memorandum. In either case, this will generally be a comprehensive document setting out: • a...

Discover our 35 Practice Notes on Equity financing

Project lawyers’ completion documents list—onshore wind farm and ground-mounted solar projects—template

Project lawyers’ completion documents list—onshore wind farm and ground-mounted solar projects—template PROJECT DETAILS PROJECT NAME: [insert name of project] CLIENT: [insert name of client] [Insert name of firm] PROJECT LEAD: [insert name of client/lead partner] PROJECT PARTIES PROJECT PARTY DETAILS Account Bank(s) [insert name of Account Bank] (Company Registration No. [insert number]) whose registered office is at [insert registered office of Account Bank] Agent [insert name of Agent] (Company Registration No. [insert number]) whose registered office is at [insert registered office of Agent] Architect [insert name of Architect] (Company Registration No. [insert number]) whose registered office is at [insert registered office of Architect] Arrangers [insert name of Arrangers] (Company Registration No. [insert number]) whose registered office is at [insert registered office of Arrangers] Civil Design Consultant [insert name of Civil Design Consultant] (Company Registration No. [insert number]) whose registered office is at [insert registered office of Civil Design Consultant] Construction Contractor [insert name of Construction Contractor] (Company Registration No. [insert number]) whose registered office is...

Equity commitment letter

Equity commitment letter [On letterhead of the Investor] Strictly private and confidential To: The Shareholders of [insert target name][insert address] (Sellers) From: [insert Investor name] of[insert address]in its capacity as manager of[insert Fund names](respectively Investor and Equity Investors) Date: [insert date] Dear Sellers, Sale of [insert name and registered number of company] (Company) 1 We refer to the sale and purchase of the entire issued share capital of the Company by [insert name of newco] Limited (Buyer) on the terms of a sale and purchase agreement between the Sellers and the Buyer to be entered into on the date of this letter (SPA). Unless otherwise provided, the terms used in this letter are as defined in the SPA. 2 In consideration of the Sellers entering into the SPA: 2.1 The Investor undertakes on behalf of the Equity Investors to the Sellers: 2.1.1 that, subject to: (a) fulfilment of the Condition[s] contained in clause[s] [insert clause[s]] of the SPA; [and] (b) the SPA not having...

Dive into our 3 Precedents related to Equity financing

Can a limited liability partnership (LLP) issue loan notes or other types of debt securities?

Can a limited liability partnership (LLP) issue loan notes or other types of debt securities? A loan note is a form of debt security which can be issued by a body corporate, ie the issuer, which entitles the holder (the noteholder) to payment of principal and interest in accordance with the terms of the loan note instrument. For an example of a typical loan note instrument used in a private equity context, see Precedent: Loan note instrument—buyout—corporate investors. A limited liability partnership (LLP) is not a partnership but a body corporate that is formed under the Limited Liability Partnerships Act 2000 (LLPA 2000). This means that an LLP has legal personality separate from that of its members. We are not aware of any reason why an LLP could not issue loan notes to parties through its entry into a loan note instrument. However, it will be necessary to review the terms of any limited liability partnership agreement (LLP agreement) entered into in respect of the LLP...

Could you please direct me to provisions setting out the terms of a 'liquidation preference' or 'payment waterfall' on a return of capital in respect of a private limited company incorporated in England and Wales?

Could you please direct me to provisions setting out the terms of a 'liquidation preference' or 'payment waterfall' on a return of capital in respect of a private limited company incorporated in England and Wales? 'Liquidation preference' or 'payment waterfall' provisions are often seen in the context of a private limited company, where that company has a private equity or venture capital fund investor. These provisions are normally set out in a company's articles of association and broadly detail the order of priority for payments to be made by a company out of its surplus assets upon a return of capital in the company, ie the order in which the company's shareholders will be paid when a company is liquidated, sold or becomes insolvent. Typically, these provisions will specifically provide that on a return of capital event, they will only apply once the company has paid all of its liabilities (including all debts) and there are surplus assets available for distribution. It is fairly common where a company is subject...

See the 5 Q&As about Equity financing

Banking & Finance weekly highlights—24 October 2019

This week’s edition of the Banking & Finance highlights includes: (1) European Scrutiny Committee queries government on UK’s access to EU financial services market after Brexit, (2) High-level CMU group publishes report on savings and sustainable investment, and (3) ESMA sets out enforcement priorities for financial reports of listed companies.

Banking & Finance weekly highlights—28 June 2018

This week’s edition of the Banking & Finance highlights includes various Brexit updates, ISDA proposes revisions to the US GAAP treatment of cross-border acquisitions and foreign debt issuance hedges and a number of developments relating to EMIR.

Read the latest 2 News articles on Equity financing