Post-acquisition cap table in an international search

Hi SearchFunder Community,

I'm looking at setting up a fund for a search for a UAE-based target. As I compare the various jurisdictions in which I can set up an international fund (Delaware, Abu Dhabi, BVI, Cayman Islands etc.) I'm trying to understand what the longer term consequences are of selecting a particular location.

I think a lot of my confusion is coming from a lack of understanding on how the actual search fund entity is involved in the company acquisition.

Let's assume for the sake of discussion that I set up and incorporate a search fund, with 10 investors, as a Delaware LLC.

We then find an attractive target with an EV of $10m, the acquisition of which we will finance with 50% equity and 50% debt. The equity component ($5m) will be raised from our search fund investors in proportion to their shareholding in the Delaware search fund vehicle.

How is the actual acquisition commonly carried out? Do my shareholders capitalise the Delaware SPV with the $5m so that it can go on to purchase the seller's company shares? In this case the Delaware search fund LLC becomes the primary shareholder on the acquired company's cap table.

Or, alternatively, is a share sale and purchase agreement drawn up between the seller and my search fund investors so that they sit directly on the acquired company's cap table? In this case is the Delaware search fund LLC then wound down, because it no longer serves a purpose?

Or, finally, is a new SPV created (potentially in a different jurisdiction) to go out and actually acquire the company's shares? In this case the new SPV becomes the primary shareholder on the acquired co's cap table.

I suppose what I'm trying to figure out is, when it comes to the set up of my search fund, can I optimise for speed and ease of set up for now, knowing that I will still have the flexibility to set up the optimal company ownership structure later on?

Thanks in advance!

Edmond