{"id":173846,"date":"2022-08-08T08:07:49","date_gmt":"2022-08-08T07:07:49","guid":{"rendered":"https:\/\/legalvision.co.uk\/?p=173846"},"modified":"2025-07-02T00:40:50","modified_gmt":"2025-07-01T23:40:50","slug":"acquisition-finance","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/business-sale-purchase\/acquisition-finance\/","title":{"rendered":"How Do I Finance the Acquisition of Another Company in England?"},"content":{"rendered":"

If you are interested in buying another business, you can choose to acquire it outright or merge it with your own business. Regardless, paying for a business can be an expensive endeavour. Unless you have sufficient cash lying around, you will probably need to fund the acquisition by drawing on outside funds. This article will explore the different ways you can finance the acquisition of a company.\u00a0<\/span><\/p>\n

Acquisition Finance<\/span><\/h2>\n

Acquisition finance refers to raising capital (money) specifically to purchase another business. The parties involved in the purchase of a business (the target) will be the buyer (you or your business) and the seller (the owner of the business you are buying).\u00a0<\/span><\/p>\n

Additionally, depending on the finance strategy, it is common to have one or more banks involved in the deal. These banks will lend capital to the buyer or the target company itself.\u00a0<\/span><\/p>\n

Transaction Structure\u00a0<\/span><\/h3>\n

Typically, you can structure a business sale as either a <\/span>share sale or an asset sale<\/span><\/a>.\u00a0<\/span><\/p>\n

In a share sale, the only thing changing hands are the shares in the business’ parent company. In an asset sale, as the buyer, you would choose which assets you wish to acquire. These would then be transferred directly to you or one of your business\u2019 companies. Alternatively, you can create a new company and transfer those assets to it.\u00a0\u00a0<\/span><\/p>\n

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The structure of the acquisition can influence the acquisition strategy, depending on the circumstances.\u00a0<\/span><\/p>\n<\/div>\n

Equity Financing\u00a0<\/span><\/h2>\n

In the context of acquisition financing, <\/span>equity financing<\/span><\/a> is where the buyer\u2019s shareholders inject additional cash into the business in exchange for additional company shares.\u00a0<\/span>The buyer then uses the cash raised by shareholders to acquire the target company, either by purchasing the shares held by the target\u2019s owners (the seller) or the desired assets in the business.\u00a0<\/span><\/p>\n

If you own a private company, it is impossible to offer shares for sale to the public. That said, you could feasibly approach your network and invite them to acquire shares in your business. However, you should fully inform them of the risks associated with becoming a shareholder. In practice, they should seek legal advice before buying any shares in your company.\u00a0<\/span><\/p>\n

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Suppose you intend to bring on additional shareholders. In that case, you must ensure that any existing shareholders have had the chance to acquire the number of shares necessary to preserve their portion of ownership in the parent company. This is called the <\/span>right of pre-emption<\/span><\/a> or the right of first refusal.\u00a0<\/span><\/p>\n<\/div>\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\n

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