Key considerations a Private Equity firm would need to take into consideration include:

Financially

• Development capital introduced to provide headroom within the company and ability to deliver growth strategy
• Private equity have the ability to remove any bank financing, therefore, less onerous covenants with reduced reporting to the bank

Ongoing cost

• Non rolled up loan note interest
• Private equity house monitoring fee
• Chairman fee

Corporate

• Appointment of chairman
• 10 board meetings required per year
• Monthly management reporting to private equity house
• Appointment of Investment Director and board observers
• Raise profile and credibility of the company by having private equity investment
• Improved internal systems and procedures

Trading

Typical consent matters, which would require approval from the private equity house before being actioned:

• Make material change to nature of the business
• Capital expenditure over a set value
• Entering into contracts over a set value, onerous or not at arms' length
• Acquiring or disposing of businesses
• Enter into partnership or joint venture
• Appointing senior or high paid staff
• Appointment of Statutory Directors
• Changes to share capital
• Appointment of auditors
• Make any change of bank or terms of any mandate given to any banks
• Borrow or lend any monies