Glossary

Takeover of a company with an external corporate officer purchasing with the seller and/or with the company’s managerial staff. 

A series of acquisitions funded primarily through debt, carried out by a company acquired through an LBO (Leveraged Buy-Out), in order to form a larger more profitable group thanks to the resulting synergies, and therefore a better valuation for its shareholders at the time of its subsequent disposal. 

A company’s 3 to 5-year strategic development plan, with detailed comments covering business, the competition, products, technical matters, means of production, investments, people, IT, finance, etc. 

A company has reached its break-even point and is making profits. The funds will be used to boost its production capacities and its sales force, develop new products and services, fund acquisitions and/or increase its working capital. 

Acquiring a stake (i.e. making an equity investment) in usually unlisted companies. Private Equity is essential backing for the unlisted company throughout its existence. It funds the company’s start-up (venture capital), development (development capital), and transfer or acquisition (LBO/turnaround capital). 

The capital serves to enable a team of in-house or external senior managers to acquire an existing unlisted company, assisted by equity investors together with financial investors. This type of financing involves the formation of a holding company, which uses debt to acquire the target company (leverage/gearing effect). 

In the financing structure of an LBO, this is the redeemable debt contributed by the banks. The annual interest and annual repayment have priority over mezzanine debt. 

All the research and audit measures enabling a venture capital investor to base their judgement on the company’s activity, financial position, earnings, development prospects and organization 

The multiplying effect of return on equity resulting from the use of external financing. 

The non-financial criteria considered in socially responsible management, namely Environmental, Social and Governance factors. 

In the UCITS category, FPCI is an investment fund designed for making equity investments in unlisted companies. With no legal personality of its own, it is managed by an asset management firm accredited by the AMF (the French Financial Markets Authority), which acts in the name and on behalf of the FPCI, representing and committing it. An FPCI is subscribed for by well-informed investors. 

SRI (Socially Responsible Investing) is an investment that aims to strike a balance between economic performance and social and environmental impact by financing companies and public-sector entities that contribute to sustainable development, whatever their economic sector. SRI promotes a responsible economy by influencing the governance and behaviour of the players. 

Acquisition of a company by venture capital investors together with the senior managers of the acquired company, as part of a financing package comprising a larger or smaller proportion of loans, repayment of which is done by a deduction from future cash flows. 

Takeover of a company by one or more external managers.

Takeover of a company by its management team (one or more of its managerial staff, not shareholders or minority groups).

Takeover of a company by a holding company jointly held by the current owner-manager and by financial investors. 

An agreement entered into between the company’s shareholders (founders and equity investors) to organize their relations as shareholders. 

A deal that consists in acquiring the capital of a listed company with a financial investor with the aid of a gearing structure (LBO) and delisting the said company.