Financial buy-outs

Editor : Larcier, Cahiers Financiers

Author : Hugues Lamon – Tax Advisor, Certified Financial Analyst, Director at PricewaterhouseCoopers Tax Services within M & A department.

The Belgian Venture Capital (or Private Equity) market has been reasonably active since the end of the nineties and remained so during the slower economic period after 2000. The year 2004 has indicated that this trend will continue, as recent deals have been greatly increasing in volume and numbers.
As the market matures and evolves, so does the variety of issues that venture capitalist investors will have to address when doing a deal in Belgium.

This publication is a practical guide to the challenges involved in setting up an LBO or MBO in Belgium and draws on recent practice in the shape of a case study inspired by an actual buy-out carried through on the Belgian market.
The aim here is to address these issues systematically, focusing on the legal, financial and tax issues that investors, managers, bankers and entrepreneurs face in a Belgian buy-out deal.
The analysis covers the structuring of the deal, the financing instruments used, how shareholders’ funds are allocated, the incentives offered to managers and the fund structures behind the scenes of the private equity market.