An acquisition vehicle, often called a Newco, is a new company you set up to buy the business. Most share purchases use one: the Newco borrows the money and buys the target's shares, and the target becomes its subsidiary.
Why buyers use one
- The borrowing sits in a company, not with you personally, although you may still give a personal guarantee. See Will I have to give a personal guarantee to buy a business?.
- It keeps the deal structure clean and makes future deals, such as bolt-ons, easier.
- It suits buyers coming together to buy a business, such as a management team.
Why lenders like it
The lender can take security across both the Newco and the business it buys, and repayments come from the combined group's cash flow.
Do I need one?
Our acquisition lenders expect a UK-registered company to buy through, or a clear plan to set one up before completion. On an asset purchase you might use an existing company instead.
Get advice
Setting up a Newco has tax and legal points, especially in management buyouts. Speak to your accountant and solicitor early.
Last reviewed: 8 October 2026