Bidco

An acquisition vehicle used in a transaction structure. Which entity signs the purchase agreement, borrows, guarantees obligations or provides security depends on the documents and structure.

Bidco in practice

Hypothetical: an acquisition vehicle buys a target’s shares and borrows under a credit agreement. The documents separately identify the borrower, any guarantors and each security provider. Sponsor recourse, if any, must be established from the relevant obligations; it cannot be ruled out from the Bidco label alone.

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