Jurisdiction(s):
United Kingdom

Key definition

Private equity definition

What does Private equity mean? Private equity describes investment by professional funds in unlisted (unquoted) companies to obtain minority or controlling stakes, financing growth, management buy-outs/ins, recapitalisations or turnarounds, often alongside acquisition debt. The shares acquired are not admitted to trading on a stock exchange, so are less marketable and less liquid than public (quoted) equity. The term is not defined in legislation or case law; it is a market description used consistently across England & Wales, Scotland, Northern Ireland and Ireland. Transactions are privately negotiated and typically documented through investment and shareholders’ agreements, amended articles, preference shares or loan notes, management incentive arrangements (such as...

UK Private Equity Buyouts: Acquisition Documentation - SPA, Tax Covenant, Ancillary Documents, Timing and Responsibilities

Published by a LexisNexis Corporate expert

Practice notes

This Practice Note forms part of the Lexis+® UK Corporate Private equity Buyout transaction collection.

Timing

Preparation of an initial draft Share purchase agreement (SPA) can start at any point once the principal commercial terms are agreed and the heads of terms for the acquisition component have been signed. The due diligence and disclosure workstreams proceed in parallel with the drafting and negotiation of the SPA. The earlier the private equity investor undertakes substantive due diligence, the sooner its findings can guide negotiation of suitable warranty and indemnity protection for the buyer within the SPA.

In the ordinary course—save where the sale is conducted by auction—the investor’s solicitors will produce the first SPA draft and send it to the seller’s solicitors for mark-up. Successive versions then move to and fro between the parties until exchange (the signing of the SPA), which will occur ahead of completion where completion is subject to conditions, or at the same time as completion where no conditions apply...

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Web page updated on 22/05/2026

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