Financial investments made by investors are undoubtedly the prototypical private equity/venture capital transaction. However, in practice, such transactions may take various forms and structures and involve diverse groups of people, which results in the broad typology of transactions analyzed in this chapter. This chapter also covers the different phases and elements that make up the investment / divestment cycle.
The investment agreement is the culmination of a long and complex process that typically begins with preliminary contacts between the parties and ends with the signature of a share purchase agreement (SPA), after having signed the usual letter of intent (LOI) or memorandum of understanding (MOU) and completed a due diligence.
The divestment involves, in turn, a similar process when the counterparty is a strategic buyer or if it materializes through a secondary buy out (SBO); however, the process and the factors at stake are substantially different when the exit is completed through an initial public offering (IPO).
|
