Deal Structure

A private equity transaction in which two or more PE firms jointly acquire a target company, sharing the equity investment, risk, and governance responsibilities. Club deals enable firms to pursue larger transactions than they could finance individually and provide portfolio diversification benefits.

The process by which private equity and venture capital firms identify, evaluate, and originate potential investment opportunities. Effective deal sourcing increasingly relies on proprietary data, network effects, and reputation — all intangible assets that distinguish top-performing funds.

The total consideration transferred by the acquirer to obtain control of a target business in a merger or acquisition. The purchase price encompasses cash, shares, assumed liabilities, and contingent consideration, and forms the basis for purchase price allocation under IFRS 3 and ASC 805, where it is allocated across identified tangible assets, intangible assets, and goodwill.

A non-binding document outlining the key terms and conditions of a proposed investment, including valuation, investment amount, equity stake, board rights, liquidation preferences, anti-dilution provisions, and other protective clauses. The term sheet forms the basis for negotiation before definitive legal agreements are drafted.

A specialist insurance policy used in M&A transactions that covers losses arising from breaches of the seller's warranties and representations in the sale and purchase agreement. W&I insurance shifts the risk of warranty claims from the seller to an insurer, enabling cleaner exits for sellers and reducing the need for escrow holdbacks.

A separate legal entity created for a specific financial purpose, such as isolating risk, holding assets, or facilitating a particular investment. SPVs are commonly used in venture capital for individual deal syndication and in private equity for structuring leveraged acquisitions.

The contractual framework in an M&A transaction that determines how the final purchase price is calculated and adjusted to reflect the financial position of the target at closing. The two principal mechanisms are completion accounts (which adjust the price post-closing based on actual financial metrics at the completion date) and locked box (which fixes the price based on a historical balance sheet date with no post-closing adjustment).

The framework of policies, procedures, and organisational structures that guide the responsible development, deployment, and monitoring of artificial intelligence systems. AI governance encompasses risk management, ethical guidelines, regulatory compliance, model validation, and accountability mechanisms.