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Glossary of Terms

Set out below is a Glossary of standard transactional terminology for private equity and corporate finance transactions. Use the filter menu if you are looking for a specific term, or to navigate the Glossary alphabetically.

Secondary buy-outThis is a common exit strategy for private equity suppliers. The management team along with a different private equity funder acquire the business allowing the current private equity supplier to exit from its investment.

Seed capitalAn institutional equivalent of a Business Angel. They provide early stage finance to a company with a business venture or idea which has not yet been established. They may be in the form of funds managing other people's money or may be companies investing in their own right.

Senior debtThis is debt provided by a bank which is usually secured and ranked ahead of other loans and borrowing in the event of winding up.

Share for share exchangeShare for share exchange is commonly used in group re-organisations, for example, to create a new holding company. It is when the shareholders in company A sell their shares to company B in return for an issue to them of shares in company B. This results in company B becoming the sole shareholder in company A.

Subordinated loanLoans which are ranked after other debt. It is normally repayable after other debt. As such it is more risky for the lender. An example of a subordinated loan is mezzanine finance.