This Practice Note is part of the Lexis+® UK Corporate private equity buyout transaction toolkit.

As well as deciding whether the transaction should be structured as a share purchase or asset purchase transaction, there are many issues that may need to be considered at the outset of the private equity buyout (MBO) transaction before due diligence and negotiation of the main transaction documentation. These issues may affect the main commercial and legal terms of the transaction, so it is advisable for all sides to consider them before agreeing outline commercial terms (and signing heads of terms for both the acquisition and equity components of the transaction) and setting out the timetable for the transaction.

The issues described below (and in the Practice Notes linked to in this sub-phase) will potentially be relevant throughout the transaction (especially during negotiation of the formal documentation), but they are mentioned at this early stage since lawyers acting for all relevant parties should be considering them and advising their clients on these issues as early as possible.