Timing

A private equity buyout (MBO) transaction will begin with negotiations between the parties aimed at agreeing the outline of the commercial terms in principle.

Unlike a standard share or asset purchase transaction, the parties to the negotiations are three-fold, being the investor/private equity fund, the seller and management (who in some cases may have interests in the seller and/or the target). The main terms to be agreed in order to establish whether there is a deal to be concluded will always be the price to acquire the relevant business (usually by way of share sale) and management equity post-completion. There are, however, a variety of issues both commercial and legal which will need to be addressed at the outset of a potential transaction.

Once the main commercial terms are agreed in principle, consideration of the main legal issues is underway and a deal structure has