MacRoberts Corporate Law e-update 20/11/07

BVCA IMPLEMENTS NEW DISCLOSURE REGIME FOR PRIVATE EQUITY FIRMS

As part of its new strategy to improve the public image of the PE Industry the British Venture Capital Association today publicised a new transparency and disclosure regime. The regime to be adopted on a voluntary basis by large private equity houses and their portfolio companies will help demystify the industry, facilitate presentation of the 'good' stories and allow easier comparison of performance with quoted UK Companies in comparable business areas.

The PE firms affected are those owning, controlling or having the ability to own or control a UK company that

• (a) generates 50% or more of their revenue in the UK; and
• (b) has 1000 or more FTE employees; and
• (c) at the time of acquisition had an enterprise value of £500 million (in a secondary or non-market transaction) or a market capitalisation together with the premium for acquisition of control, in excess of £300 million (in a take private transaction).

A key feature of the regime is the requirement for each portfolio company to publish an annual business review which substantially conforms to S417 of the Companies Act 2006 including sub-section 5 that otherwise only applies to quoted companies. The regime establishes a monitoring and review body with an independent chair and majority independent members to check compliance of the industry with the regime. The Board is expected to be in place in early 2008.

Details of the regime including criteria for affected companies can be found at
www.walkerworkinggroup.com

If you require any further information please contact Alan Kelly on 0131 229 5046

© MacRoberts 2007