Jurisdiction(s):
United Kingdom

Key definition

Acquisition finance definition

What does Acquisition finance mean? acquisition finance is the debt and/or equity raised to fund the purchase price and costs of an acquisition. It is a market term, not defined in legislation or case law, and is used across corporate, banking and leveraged finance practice. Funding may include bank term and revolving facilities, private credit/direct lending, bridge-to-bond loans, high‑yield bonds, mezzanine, vendor loan notes, and equity (for example, a share issue or private subscription). In leveraged buyouts it is commonly secured on the buyer/target group with upstream and cross‑stream guarantees, subject to corporate benefit, distributions rules and financial assistance restrictions. Across England & Wales,...

UK leveraged acquisition finance facilities agreements: LMA-based structures, certain funds, key covenants, pricing, prepayment, guarantees, transfers, debt buy-backs, amendment mechanics, conditions precedent and differences from investment grade

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Practice notes

This Practice Note offers a primer on the standard provisions you would expect in a straightforward facilities agreement used in leveraged acquisition finance. It outlines the likely funding sources for leveraged acquisitions, then highlights the principal respects in which a typical leveraged facilities agreement departs from a standard investment‑grade facilities agreement. It then walks through each section of a conventional senior leveraged finance facilities agreement. For an introductory guide to acquisition finance, see Practice Note: Introductory guide to acquisition finance, and for a glossary of commonly used terms and jargon, see the Glossary of acquisition finance terms and jargon.

Sources of finance for leveraged acquisitions—impact on documentation

Senior facilities represent just one of several potential funding routes for leveraged acquisitions; this section briefly surveys the available options. Acquisition finance transactions are typically structured with a blend of debt and equity. The debt element may comprise high yield or senior notes, loans, or a combination. Where loans fund all or part of the transaction, multiple loan facilities can be employed, each occupying a distinct rung within the capital structure...

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Web page updated on 21/05/2026

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