Acquisition finance—key documents and parties
Acquisition finance—key documents and parties

The following Banking & Finance guidance note provides comprehensive and up to date legal information covering:

  • Acquisition finance—key documents and parties
  • Key parties in an acquisition finance transaction
  • Purchaser
  • Seller
  • Debt providers
  • Target group
  • Documents—overview
  • Acquisition documents
  • Equity documents
  • Finance documents

This Practice Note provides a basic introduction to the key parties and documents involved in an acquisition finance transaction together with links for more detailed information.

For a more general introductory guide to acquisition finance, see Practice Note: Acquisition finance—introductory guide. For a glossary of acquisition finance terms and jargon, see the Glossary of acquisition finance terms and jargon.

For a description of the way a buy-out might typically be structured, see Practice Note: Structure of a buy-out.

Detailed information on the parties and documentation can also be found in Chapter 1 of Tom Speechley: Acquisition finance.

Key parties in an acquisition finance transaction

The parties to an acquisition finance transaction will depend on the nature and structure of the transaction and how it is funded. This Practice Note provides information on:

  1. the buyer, ie the private equity house (sponsor) and special purpose vehicles (SPV) through which it makes the purchase

  2. seller

  3. debt providers, and

  4. the target and its subsidiaries

Purchaser

Sponsor

The sponsor is the private equity firm that provides the equity portion of the funding needed for the purchase.

The sponsor may be captive, ie part of a large institution such as a bank. Alternatively, it can be independent, ie owned and managed by senior officers in the firm. The sponsor will not normally invest its own money. Instead, it will