Newco meaning

In a private equity-backed management or leveraged buyout, the principal documents fall into three main groups: Acquisition documents — these set the terms of the purchase between the seller and the buyer (ie newco) Equity documents — these set the terms of the equity investment and govern the relationship between the investor/s and management Finance documents — these cover the provision of the debt facilities and any related facilities (for example, a revolving credit facility for working capital) Acquisition documents Heads of terms (acquisition) The heads of terms, kept to a short form, provide a high-level summary of the parties’ expectations, shared understanding and agreement on the key terms of the intended acquisition. They are signed at the outset of the deal once the parties have aligned on the principal points and before the investor incurs costs on due diligence and the negotiation of the transaction documents...

Parties Who are the parties involved? In particular, specify: the investor(s) the managers the investee company (newco) Conditions Are there any conditions to completing the investment? What are each party’s obligations to meet those conditions, and by what deadline? Share subscription What will the investee company’s capital structure be? Which class and how many shares will each shareholder (the investor, the managers and any other shareholders) subscribe for? Warranties Who will give the warranties? Is it limited to the managers? Will they be provided jointly, jointly and severally, or on a several basis? How wide will the warranties be? It is usual for investment agreement warranties to centre on the business plan and the managers, as the acquisition agreement generally affords the investor sufficient protection regarding the company. What restrictions will apply to warranty claims? These may include: periods within which claims must be notified caps on each warrantor’s liability and on...

Is land contamination an issue? According to the Law Society’s practice note on contaminated land, solicitors ought to assess potential contamination in every conveyancing matter they handle. It explains that, while only a minority of deals will be materially affected, practitioners must remain alert to possible environmental liabilities and think carefully about the enquiries and specialist support their clients might need—see Practice Note: Land contamination—Law Society practice note on contaminated land. Notably, the note summarises the contaminated land framework set out in Part IIA of the Environmental Protection Act 1990 (EPA 1990), including a concise explanation of who bears responsibility for remediation of contaminated land. Beyond clean-up obligations imposed under the EPA 1990, Pt IIA, contamination can also give rise to the following liabilities: clean-up duties under other regulatory schemes, eg environmental damage, works notices, or environmental permitting regimes civil claims, eg nuisance, negligence, or breach of contract criminal exposure, eg non-compliance with a remediation notice Refer to Practice Note: Environmental...

The Prudential Regulation Authority (PRA) The Prudential Regulation Authority (PRA), which oversees banks, building societies and credit unions, has granted Revolut NewCo Ltd, the online banking subsidiary of Revolut Group Holdings Ltd, which states it has over 9m UK customers and 45m globally. Francesca Carlesi, UK Chief Executive of Revolut NewCo Ltd, said: 'Today's announcement represents a major step forward for Revolut and for our customers ...It is a profound responsibility to be a bank in the UK, and we will work tirelessly to provide products and services'...

CASE HUB ARCHIVED This archive records the position as at the decision of 24 May 2013 and the conclusion of enforcement action on 29 October 2014; it is not updated. For more, see the timeline and commentary. Case facts Summary of the European Commission’s merger probe into the proposed combination of Munksjo with part of Ahlstrom’s operations to create ‘NewCo’ (Case M.6576). The Commission cleared the deal subject to commitments on 24/05/2013. Subsequent enforcement proceedings concerning the alleged supply of misleading information were initiated by the Commission but discontinued on 29/10/2014. Latest developments The Commission approved the merger with conditions on 24 May 2013. The accepted remedy is the sale of Ahlstrom’s abrasive paper backings and PRIP unit based in Osnabrück, Germany. Ahlstrom will keep one paper machine at the site, which is not used to make either abrasive paper backings or PRIP. Certain on-site utilities will be moved into a new joint venture jointly controlled by Ahlstrom and the purchaser of the divested assets....

This Practice Note is about the tax implications of liquidation demergers, also known as section 110 demergers, after section 110 of the Insolvency Act 1986 This Practice Note examines the tax consequences of liquidation demergers, sometimes referred to as section 110 demergers, taking its label from section 110 of the Insolvency Act 1986. For context on the reasons a company may undertake a demerger, and an overview of alternative structures, see Practice Notes: Demergers—an introduction to the tax issues and Demergers—an introduction for corporate lawyers. Detailed Practice Notes cover the tax aspects of the principal demerger routes: statutory (or dividend) demergers, which can be direct or indirect—see Practice Note: Statutory demergers capital reduction demergers—see Practice Note: Capital reduction demergers liquidation demergers—the focus of this Practice Note Typically, a liquidation demerger involves placing a new holding company at the top of the group, then putting that new holding company into liquidation. The liquidator then transfers the businesses being separated to two new...

Performance ratchets This Practice Note explores the tax implications for the UK management team in a private equity-backed management buyout (MBO) that arise specifically from performance ratchets. Performance ratchets are a device employed by private equity firms investing in MBOs to motivate management and align their interests with those of the private equity backer. The success of an MBO is typically highly reliant on the management team. Managers can be incentivised, and their interests aligned, by subscribing for shares in the top company of the acquisition group (Newco 1), giving them a stake in the proceeds of a future private equity exit (ie on top of any salary). Performance ratchets give management the chance to uplift the value of their equity holding further where defined performance targets are achieved. This Practice Note concentrates on the tax issues arising specifically in relation to performance ratchets. For a wider discussion of the tax considerations relevant to management shares held in Newco 1, see Practice Note: Tax and management buyouts—management shareholdings...

Dated [ insert date ] Introduction This legal due diligence questionnaire concerns the intended acquisition by [ insert buyer name ] ( Newco ) of the whole issued share capital of [ insert name of target company ] Limited (the Target ) from [ insert seller name ] (the Seller ) (the Proposed Acquisition ). The questionnaire exists to enable Newco, Newco’s solicitors and its professional advisers involved in the Proposed Acquisition to obtain the information they require to aid the valuation of the Target and the subsidiaries of the Target (the Group and each a Group Company ). We reserve the right to raise further enquiries in relation to both your replies to this questionnaire and generally...

[ On the Investor’s letterhead ] Strictly confidential and private To: The Shareholders of [ insert target name ] [ insert address ] ( Sellers ) From: [ insert Investor name ] of [ insert address ] in its role as manager of [ insert Fund names ] (respectively, Investor and Equity Investors ) Date: [ insert date ] Dear Sellers, Sale of [ insert name and registered number of company ] (Company) 1 We write in relation to the acquisition of the entire issued share capital of the Company by [ insert name of newco ] Limited ( Buyer ), under a sale and purchase agreement between the Sellers and the Buyer to be executed on the date of this letter ( SPA ). Unless stated otherwise, the terms used in this letter carry the meanings assigned to them in the SPA...

This agreement is dated [ insert day and month ] 20[ insert year ] Parties [ Insert name of company in which the shares are held ], incorporated in England and Wales with company number [ insert company number ] and having its registered office at [ insert address ] (the Company), [ Insert name of company in which the shares are held ], incorporated in England and Wales with company number [ insert company number ] and having its registered office at [ insert address ] (Newco 2), [ Insert name of company in which the shares are held ], incorporated in England and Wales with company number [ insert company number ] and having its registered office at [ insert address ] (Newco 3), The various persons named and addressed in Schedule 1 (together, the Managers), and The various persons named and addressed in Schedule 3 and any other such person as defined in clause 1.4 (the Investors) ...