SPV Structures for Acquisition

by a searcher from Washington University in St. Louis

2 years ago

I learnt that an SPV company would be the safest approach for acquisitions.

A parent company creates an SPV to isolate or securitize assets in a separate company that is often kept off the balance sheet. It may be created in order to undertake a risky project while protecting the parent company from the most severe risks of its failure.

Here is further reading. Please feel free to pitch in with your thoughts and suggestions
https://www.investopedia.com/terms/s/spv.asp

1 like
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2 comments

intermediary from University of Virginia-Darden - Darden School of Business

Agreed in terms of generally keeping the risks limited to the SPV and protecting other entities from spillover risks. However, it is not a "create and forget" structure and does not guarantee protection in every situation as a court can disregard the entity for several reasons.

2 years ago | like reply | 0 likes

searcher from University of Pennsylvania - The Wharton School

Karthik, these structures for one-off acquisitions are generally pretty simple. Happy to discuss from a legal perspective if you need at some point.

2 years ago | like reply | 0 likes

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