Consulting editor(s): Chris Hale, Travers Smith LLP
Publication date: Mar 2020
Review for previous edition: "It covers quite unflinchingly the difficult technical issues of the law."
About the book:
Much has happened in the three years since the publication of the last edition of this book. In the last 2-3 years, private equity houses have raised huge amounts of money to invest which has had an effect on the dynamics of the market. In addition, there is a broadening of potential buyers with a number of other organisations adopting private equity style strategies.
This practical fourth edition introduces the world of private equity, explains its rise and recent dynamics, and explores the key ingredients of private equity transactions and the technical issues associated with them. Featuring fully updated chapters by leading private equity practitioners, the book includes high-level analysis of private equity fund structures, equity and debt finance, acquisition documentation, due diligence, tax structuring, pensions issues and public-to-privates.
New to this edition:
- Coverage of CFIUS issues, data protection and US sanctions matters in relation to due diligence.
- A new structural analysis of incentive equity capital and coverage of recent trends such as consortia and synthetic liquidity planning.
- Useful insight on latest market trends and how these impact on deal dynamics and deal terms, as well as a highlighting of what differentiates private equity transactions from other types of private M&A transactions.
- An overview of the anatomy of a private equity fund, a description of fund terms, reflecting changes driven by industry requirements, and a laying out of common themes across all major relevant jurisdictions.
- A look at the surge in public to private transactions, and the new rules introduced by the UK Takeover Panel, including the additional disclosure of finance documents and transaction fees and stricter rules on future intentions for running the target business.
- Discussion of the notable increase in alternative lenders, and how new and evolving ‘unitranche’ structures compare to more traditional bank lending, helping readers to smooth the process and put together the optimal debt finance package for each transaction. There is also consideration of the effect of this increased liquidity in improving the financing terms available to sponsors, as well as wider market and regulatory developments, including the on-going transition from LIBOR and similar interest rate benchmarks to alternative ‘risk free’ rates.
- The latest absolute and relative performance numbers on private equity.
- Coverage of the legal and market practice cross-pollination of US and European heritage funds. A look at the developments driven by the focus on new markets for them, such as the increasing use of pricing mechanic ‘locked boxes’ in the US, and how this might impact their use in Europe.
- Discussion of the core elements of transaction structuring, including the objectives of the financial investor and the fundamentals of management planning, as well as the ever-changing tax risk environment, and newer tax rules including the corporate interest restriction and the amended entrepreneurs’ relief rules.
- Consideration of the regulatory change required in governance of large private companies and transparency, and how PE funds might manage the risks of portfolio companies.
- A broad explanation of the current topics and trends in venture capital, which will help customers to understand the operation of venture capital investments in Spain, as well as a more detailed explanation of the good leaver/bad leaver provisions and exits mechanisms.
- A review of the changes in the shape of the leveraged buyout market, such as the influx of new finance providers and the significant erosion in the customary protections afforded to lenders.
- Consideration of the likely, significant impact of forthcoming reforms to the UK’s restructuring framework on the course of future restructurings.
Also new to the fourth edition is coverage of Brexit.
The book is a must-have handbook for legal and other practitioners working or advising in private equity, as well as for senior private equity executives, investment houses and investors. Academics in corporate law and business schools, as well as their students, will also find the new edition of great value.