Private equity (transactions)—Spain—Q&A guide

The following Financial Services practice note provides comprehensive and up to date legal information covering:

  • Private equity (transactions)—Spain—Q&A guide
  • 1. What different types of private equity transactions occur in your jurisdiction? What structures are commonly used in private equity investments and acquisitions?
  • 2. What are the implications of corporate governance rules for private equity transactions? Are there any advantages to going private in leveraged buyout or similar transactions? What are the effects of corporate governance rules on companies that, following a private equity transaction, remain or later become public companies?
  • 3. What are some of the issues facing boards of directors of public companies considering entering into a going-private or other private equity transaction? What procedural safeguards, if any, may boards of directors of public companies use when considering such a transaction? What is the role of a special committee in such a transaction where senior management, members of the board or significant shareholders are participating or have an interest in the transaction?
  • 4. Are there heightened disclosure issues in connection with going-private transactions or other private equity transactions?
  • 5. What are the timing considerations for negotiating and completing a going-private or other private equity transaction?
  • 6. What rights do shareholders of a target have to dissent or object to a going-private transaction? How do acquirers address the risks associated with shareholder dissent?
  • 7. What notable purchase agreement provisions are specific to private equity transactions?
  • 8. How can management of the target company participate in a going-private transaction? What are the principal executive compensation issues? Are there timing considerations for when a private equity acquirer should discuss management participation following the completion of a going-private transaction?
  • 9. What are some of the basic tax issues involved in private equity transactions? Give details regarding the tax status of a target, deductibility of interest based on the form of financing and tax issues related to executive compensation. Can share acquisitions be classified as asset acquisitions for tax purposes?
  • More...

Private equity (transactions)—Spain—Q&A guide

This Practice Note contains a jurisdiction-specific Q&A guide to private equity (transactions) in Spain published as part of the Lexology Getting the Deal Through series by Law Business Research (published: December 2020).

Authors: Cases & Lacambra Abogados SLP—Lucas Palomar; Bojan Radovanovic

1. What different types of private equity transactions occur in your jurisdiction? What structures are commonly used in private equity investments and acquisitions?

Private equity transactions mainly consist of the acquisition of controlling stakes of private companies. Acquisitions involving minority stakes are also seen.

The acquisition is typically a share deal and the consideration is typically a cash payment.

Many large transactions are managed under an auction process, and mid-market deals tend to be handled through a bilateral approach. Private equity players try to contact target companies at an early stage to get bilateral deals with an exclusivity period.

In terms of structuring, private equity funds usually acquire a controlling stake in a business and set up a special purpose acquisition vehicle (SPV). The SPV executes the investment, obtains the necessary funding (normally through a combination of debt and equity) and may incorporate as shareholders the management team that co-invests with a minority stake. If the acquisition does not entail a 100 per cent acquisition of the target, it is complemented by a shareholders' agreement that includes standard and generally accepted provisions (relating to governance, reserved

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