Acquisition holding (NewCo)

An acquisition holding company (NewCo) is a special-purpose vehicle created specifically to acquire a target business. It is the standard structure in LBO transactions: the NewCo raises acquisition debt secured against the target's assets and cash flows, then merges with or holds the target post-closing. Beyond LBOs, NewCos are used to ring-fence acquisition risk from the buyer's existing business, optimise the debt structure, and facilitate financial structuring. In Switzerland, the choice of NewCo jurisdiction (GmbH vs SA) has direct implications for financing flexibility and tax efficiency.

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Example: a private equity fund acquires a Swiss industrial group for CHF 40.0 million through a NewCo financed with CHF 22.0 million of senior debt and CHF 18.0 million of equity. The NewCo is structured as a Swiss SA to benefit from the participation exemption on dividends received from the target, optimising cash repatriation to service debt.

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Hectelion advises on NewCo structuring and valuation in buy-side and LBO transactions across France and Switzerland.