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From Buy to Build: Structuring Private Equity Investments

October 11, 2022 (1 min read)

In a typical private equity M&A transaction, a private equity fund acquires a controlling or significant minority stake in the equity securities of a privately-held target company (referred to as a portfolio company once acquired), with the goal of improving the financial condition of the portfolio company and selling it at a premium within a short period of time. This practice note focuses on the issues related to making investments in privately held targets, and covers the following elements of private equity transactions: the structure of private equity investments, configuring management incentives, negotiating control and liquidity rights, investment financing, capital structures of private equity portfolio companies, and exiting a portfolio investment.

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