Private Equity 2026 Comparisons

The Slovenian private equity (PE) market has continued to develop over the past 12 months, although it remains relatively small compared to more mature European jurisdictions. A significant catalyst for the development of the domestic private equity ecosystem has been the Slovene Equity Growth Investment Programme (SEGIP), established by the European Investment Fund (EIF) in co-operation with SID Banka. The programme has increased the availability of equity financing for Slovenian companies by supporting domestic fund managers and facilitating the establishment of new private equity and venture capital funds, more recently targeting succession-driven opportunities. SID Bank was also appointed manager of the Holding Fund, which will receive EUR190 million in ERDF funds by end-2029, plus about EUR115 million in matching contributions from selected financial intermediaries (banks, savings banks, public funds) – making at least EUR280 million in repayable financing available to businesses and other final recipients, to boost sustainable economic growth via EU cohesion funds.

The Slovenian private equity market is led by ALFI PE, the largest private equity fund manager based in Slovenia, with a sizeable and established presence built across three PE funds. The market has in recent years broadened to include newer managers such as Advance Capital Partners, MS CAP and Prva Capital Partners, alongside a number of smaller PE funds and family offices. While ALFI PE remains the largest and most established domestic platform, Advance Capital Partners has been scaling rapidly, closing its fourth fundraising round in December 2025 and bringing total commitments across its funds to approximately EUR249 million. This domestic base is increasingly complemented by regional investment, most notably Croatia’s BOSQAR, which acquired a majority stake in Slovenia’s Panvita Group in 2024 and has since continued to expand its regional platform – including a EUR143.2 million dual tranche sustainability-linked bond issuance in June 2025 (the largest corporate SLB issuance in Croatian history) and signing the share purchase agreement (SPA) for acquisition of a 100% share in Croatia’s PIK Vrbovec in May 2026. More broadly, the Panvita investment is serving as a cornerstone of BOSQAR’s “Future Food” vertical, which brings together its agro-food investments – notably Panvita and Croatia’s Mlinar – with the ambition of building a leading regional food platform in Southeast Europe.

Croatia’s Provectus Capital Partners has also emerged as an active cross-border investor in Slovenia: it entered the Slovenian healthcare sector directly in 2022 through its acquisition of the Ptuj-based radiology centre Digitalna slikovna diagnostika, and, following the first close of a EUR162.5 million second fund in October 2025 (targeting EUR250 million by mid-2026), joined forces with Advance Capital Partners by selling Advance Capital Partners a 50% stake in Adria Dental Group in June 2026. This transaction is another sign of a broader – and increasingly two-way – trend of cross-border joint ventures between Slovenian and Croatian private equity sponsors. Beyond this regional dynamic, there has also been periodic entry by global funds, such as German fund Mutares acquiring the retailer Mimovrste d.o.o. in March 2026 and OTP Fund Management Ltd together with the OTP banka d.d. acquiring Primorski skladi d.d., Koper in May 2026.

Private equity transactions in Slovenia continue to focus predominantly on founder- and family-owned businesses. Many successful Slovenian companies are currently facing ownership succession – whether generational, founder-driven or structural – with succession planning representing the principal investment thesis for many transactions.

Although succession planning represents a significant driver of private equity activity in Slovenia, investments are also increasingly aimed at supporting the further development of established businesses. Private equity investors seek to enhance operational performance, professionalise management structures and help companies realise their full growth potential. In many cases, this is achieved in partnership with the existing management team, which remains involved in the business.

The most active sectors for private equity and M&A transactions in Slovenia over the last year have included:

• IT and technology;
• energy (including renewable energy projects);
• food production and agriculture;
• retail and consumer goods; and
• healthcare.

Recent illustrations include Advance Capital Partners’ investments in Adria Dental Group (healthcare), Solvis (energy), Mikrocop (technology), Unitur (tourism) and retail (Mass). Food production and agriculture have also emerged as a particularly active theme, led by Croatia’s BOSQAR, which is building a regional “Future Food” platform around Panvita, Mlinar and PIK Vrbovec, and complemented domestically by ALFI PE’s portfolio of premium food and nutrition businesses, including Paradajz, Proteini.si and Sanivita. In addition, there has been growing interest in more specialised and niche sectors, including specialised industrial businesses, wellness and sports tourism, and modern mobility solutions. Given the relatively small size of the Slovenian market, private equity investors generally maintain a broad investment focus and remain open to attractive opportunities across different industries.

Geopolitical developments have shaped Slovenian private equity activity less through isolated events than by turning structural risks into investable growth themes. Slovenia’s still-incomplete transition away from coal and fossil fuels and the ongoing debate over a second unit at Krško’s nuclear power plant reinforce the case for domestic renewable generation. This is visible in ALFI Renewables Fund’s investments in renewable energy sources – photovoltaic and onshore wind energy – in the Southeastern European region and Advance Capital Partners’ investment in Croatian solar-panel producer Solvis, which illustrates how Slovenian investors have sought to build exposure to the wider Adriatic renewable-energy market.

The same geopolitical backdrop is encouraging European companies to diversify supply chains and increase the value of suppliers that are geographically closer to major Western European markets. Slovenia is well positioned for this trend given its industrial base, central European location and access to the Port of Koper, which provides a relatively short logistics route into Central Europe. For private equity, the opportunity is less about indiscriminate reshoring than about identifying technically specialised, export-oriented businesses with resilient customer relationships and scope for consolidation. The recent transaction of Finnish KJK III Holding acquiring Slovenian bathroom-equipment manufacturer Kolpa in 2025 illustrates the attractiveness of these assets. In short, geopolitical uncertainty is increasing the strategic value of Slovenian companies that can provide energy security, supply-chain resilience or specialised industrial capabilities, which characteristics can support both PE value creation and credible strategic exits.

In Slovenia, while the core legal framework for alternative investment funds (AIFs) was already established some years ago through a more developed regulatory framework for alternative investment funds (AIFs), namely the Slovenian Act on Forms of Alternative Investment Funds (Zakon o oblikah alternativnih investicijskih skladov, or ZOAIS), the most significant recent development has in fact been the growing body of market practice and regulatory experience built up under that framework. The accumulation of precedent in fund formation, authorisation and ongoing supervision has meaningfully increased the level of assurance available to fund managers and investors when establishing and operating funds in Slovenia.

An AIF may be established as alternative mutual fund (Alternativni vzajemni sklad), investment company (Investicijska družba) and special limited partnership (Specialna komanditna družba). Additionally, ZOAIS introduced a special type of the AIF, called a special investment fund (Specialni investicijski sklad, or SIS), whereas the range of permitted investment strategies is limited to private equity strategies, real estate strategies, fund-of-funds strategies and loan investment strategies.

Given the size and nature of the Slovenian private equity market, recent EU regulatory developments, such as foreign direct investment (FDI) screening, the Foreign Subsidies Regulation (FSR) and Corporate Sustainability Reporting Directive (CSRD) requirements, have not materially affected private equity transactions to date. Where the regime of foreign direct investment screening has been relevant, market experience suggests that the practical risk has lain less in substantive blocking decisions than in delay. The responsible authority has, in some cases, been slow to act within its statutory review periods, leaving transactions in a state of uncertainty pending clearance.

From the perspective of the regulation of AIFs and AIFs managers, the Slovenian Securities Market Agency (Agencija za trg vrednostnih papirjev, or ATVP) is the competent regulatory authority in Slovenia. Its role includes granting authorisations and approvals, maintaining relevant registers, monitoring compliance with applicable legislation, and supervising the activities of regulated AIFs and their managers. In addition, ATVP is responsible for granting SIS status to eligible AIFs and supervising their compliance with the specific requirements applicable to special investment funds.

Concentrations and Foreign Direct Investment Screening

From the contractual perspective, private equity transactions in Slovenia may also be subject to merger control and foreign direct investment (FDI) screening procedures. Merger control clearance is handled by the Slovenian Competition Protection Agency (Agencija za varstvo konkurence, or AVK), together with the European Commission (where applicable). If the transaction exceeds the statutory threshold, it must be notified to the AVK. The threshold is satisfied if the total annual turnover of all participants to the concentration, together with other companies within their respective groups, generated on the Slovenian market in the preceding financial year exceeded EUR35 million, and, at the same time, the annual turnover of the acquired company, together with other companies within its group, generated on the Slovenian market in the preceding financial year exceeded EUR1 million.

Notwithstanding the aforementioned thresholds, a concentration need not be notified to the Agency if it is being assessed by the European Commission in accordance with Regulation 139/2004/EC.

The Agency may also assess concentrations that do not reach the previously mentioned thresholds, if the undertakings involved in the concentration, together with other undertakings in their group, hold a market share exceeding 60% in the relevant market in the Republic of Slovenia.

The competent authority for FDI reviews is the Ministry of the Economy, Labour and Sport (Ministrstvo za gospodarstvo, delo in šport), which assesses transactions involving foreign investors acquiring at least 10% in capital (or of voting rights) in Slovenian companies active in sensitive sectors, such as critical infrastructure, critical technologies, critical resources, sensitive information or media. A foreign investor is an investor from a third country (non-EU country). The ownership is looked at across the entire ownership chain, not only at the level of direct owner. FDI screening may apply in parallel with merger control proceedings, meaning that a private equity transaction may require separate approvals from both the competition authority and the competent authority responsible for investment screening.

In terms of sovereign wealth investors, a state ownership or control of a foreign investor may be considered as a factor in the security and public order assessment and could lead to longer and more detailed FDI procedure.

EU Foreign Subsidies Regulation

The EU Foreign Subsidies Regulation (FSR) applies through three main mechanisms:

• mandatory notification of certain M&A transactions meeting the EUR500 million EU-turnover and EUR50 million foreign-financial-contribution (FFC) thresholds;
• mandatory notification of certain EU public tenders worth EUR250 million+ (or, in certain split-tender cases, EUR125 million per lot) where the bidder group received at least EUR4 million in FFCs from each non-EU country; and
• commissioning investigations ex officio, including the ability to call in below-threshold transactions or tenders where it suspects a distortive foreign subsidy.

Importantly, the notification trigger is the receipt of a “foreign financial contribution” (FFC), a broad concept covering, for example, grants, loans, tax benefits and government contracts – not necessarily a “foreign subsidy”. The latter requires a benefit and selectivity and is then assessed for whether it distorts the EU internal market.

On paper, the regime applies EU-wide, but in practice it bites much less frequently in smaller markets such as Slovenia, largely because of how the thresholds are structured.

Anti Bribery, Sanctions and ESG Compliance

As for the anti-bribery legislation, sanctions and ESG compliance, no material jurisdiction-specific changes occurred in the past twelve months. Slovenia implements EU legislation and follows its guidelines and policy, such as the Corporate Sustainability Reporting Directive (CSRD).

The scope of due diligence in Slovenian private equity depends on the size, value and complexity of the transaction as well as the risk involved. It is typically conducted by external law firms through a review of documents made available in a virtual data room, supplemented by Q&A sessions and follow-up document requests. In recent years, findings are more commonly presented in the form of a red flag report then a full due diligence report, identifying legal risks relevant to the transaction.

For a private equity acquisition, legal due diligence should be focused on issues that could affect enterprise value, transaction execution, financing, ownership/control, or the ability to exit. The principal areas of focus are:

• corporate structure, ownership, shareholder (JV) agreements and title;
• regulatory aspects, licences and permits;
• material commercial contracts and customer concentration;
• employment, management and collective bargaining arrangements;
• debt, security and acquisition financing;
• real estate and operational assets;
• litigation, investigations and contingent liabilities;
• competition, FDI and EU Foreign Subsidies Regulation;
• data protection, cybersecurity, technology and intellectual property (including trade secrets);
• insurance and risk transfer; and
• exit readiness and value-creation constraints.

Tax and financial due diligence is generally addressed as a separate, parallel workstream led by tax and financial advisers.

The objective is therefore not simply to identify legal non-compliance, but to distinguish between issues that are capable of being remediated pre-closing and those that could require a purchase-price adjustment, specific indemnity, escrow/retention, RWs, covenants or closing condition.

Vendor due diligence is not a common feature of private equity sales in Slovenia. The seller’s advisers will usually prepare an information memorandum and organise a data room, leaving prospective buyers to run their own due diligence exercise.

Reliance on due diligence reports by bidders themselves accordingly rarely arises in practice. However, reliance does routinely feature in the context of acquisition financing. Banks financing the transaction typically require, and are granted, reliance on the buyer-side due diligence reports as a condition for utilisation of facility.

Slovenian market practice includes mostly bilateral transactions and seller-led competitive processes.

The legal form of the acquisition does not materially change depending on whether the transaction is negotiated privately or conducted through an auction. The principal difference is the negotiating dynamic and, consequently, the allocation of contractual risk. In a bilateral transaction, the buyer will generally have greater scope to negotiate the SPA, including representations and warranties, indemnities, liability limitations, conditions precedent and closing arrangements. In a competitive process, the seller will typically seek to maintain competitive tension and may provide a seller-prepared form of SPA or prescribe principal transaction terms to which bidders are expected to respond. This can reduce the scope for negotiating buyer protections and place greater emphasis on price, execution certainty, due diligence and the bidder’s willingness to accept the seller’s proposed risk allocation.

The AIF manager is typically established in the form of a limited liability company.

A special limited partnership, which is a specific form of limited partnership in which the AIF manager, or a company established solely for the purpose of acting as general partner, acts as the general partner and the investors participate as limited partners, is then a common structure for a Slovenian private equity fund, particularly where the fund qualifies for status as a Special Investment Fund (SIS).

The use of an acquisition vehicle is common. Where one is used, it will generally be the direct purchaser and holder of the portfolio company, while the AIF and its manager retain control over the investment decision in accordance with the fund’s governing arrangements.

Private equity acquisitions in Slovenia are typically financed through a combination of sponsor equity and acquisition debt, with traditional bank financing remaining the principal source of acquisition debt. Bilateral and syndicated bank facilities are both used, particularly depending on transaction size.

Equity commitment letters may be used to provide funding certainty, particularly in competitive processes, but are not used often in Slovenian transactions. Similarly, where acquisition debt is required, sellers may seek evidence of committed financing, such as a debt commitment letter, term sheet or other lender confirmation.

There is no clear indication that Slovenian banks’ appetite for acquisition financing has deteriorated over the past 12 months. Pricing has, if anything, stabilised as the European Central Bank’s easing cycle has fed through to base rates, while lenders remain willing to finance well-structured private equity transactions on competitive terms. Lenders nevertheless remain disciplined on leverage, debt serviceability and credit quality, with greater differentiation between transactions depending on the target’s sector, cash-flow profile and overall risk. Alternative lenders and hybrid debt/equity structures continue to provide additional financing options where appropriate.

True multi-sponsor consortia, in which two or more private equity funds jointly bid for a target from the outset, do not appear to be a common feature of the Slovenian market. Sponsor-to-sponsor transactions and strategic co-investments can occur, but neither appears to constitute a standard feature of the Slovenian mid-market.

The more typical form of shared ownership in Slovenian private equity transactions is management or founder rollover, where existing owners or management retain a minority interest alongside the incoming sponsor.

Institutional investors such as the EIF and SID Banka are active in Slovenia primarily through fund-level commitments rather than deal-by-deal co-investment.

In Slovenia the predominant forms of consideration structure used in private equity depends upon the circumstances of a specific case, but generally, both locked box mechanism and completion account are used.

Earn-out mechanisms are commonly used in situations where the buyer and the seller are unable to agree on the purchase price due to differing expectations regarding the future growth and performance of the business. By linking a portion of the consideration to the future performance of the target, earn-outs allow the parties to bridge valuation gaps and align their respective expectations.

Deferred consideration arrangements are also frequently used, particularly where the buyer has stronger negotiating leverage and can negotiate a staggered payment of the purchase price over time.

Rollover structures are commonly implemented where the founders or existing shareholders wish to retain a continuing investment in the business they have built. Through an equity rollover, they reinvest a portion of their proceeds into the post-transaction ownership structure, thereby maintaining an ongoing stake in the company and aligning their interests with those of the new investors.

When acting as a buyer, a private equity investor will typically seek to negotiate a completion accounts mechanism, as this allows the purchase price to be adjusted based on the target’s actual financial position at closing and mitigates the risk of any adverse business developments occurring between signing and closing.

Conversely, when acting as a seller, a private equity investor will generally favour a locked-box mechanism, as it provides greater certainty of proceeds at signing and facilitates a cleaner exit without exposure to potential post-closing purchase price adjustments or ongoing financial liability.

W&I insurance is increasingly considered internationally as a route to a cleaner exit, though its use in Slovenia remains limited by deal size and cost.

Locked-box structures are common in Slovenia. Transactions have been observed with a ticking fee/value accrual agreed and the SPA requiring the seller to repay any leakage, euro-for-euro, to the buyer. Interest on leakage can be agreed in addition to reimbursement of the leakage itself, but this is more transaction-specific rather than a mandatory market convention.

Under a completion accounts mechanism, the parties typically agree on the appointment of dedicated experts to resolve any disputes arising in connection with the determination of the final purchase price. Such experts are independent and their determination will generally result in a final and binding purchase price adjustment.

Conditions precedent (CP) constitute an important element of private equity transactions in Slovenia. In addition to mandatory regulatory approvals, such as merger control clearance and, where applicable, foreign direct investment (FDI) clearance, SPAs commonly include transaction-specific conditions precedent. These frequently include obtaining any required shareholders’ approvals or waivers of pre-emption rights, where only a partial interest is being transferred and the existing shareholders enjoy statutory or contractual pre-emption rights. Material adverse effect provisions are also typical clauses in the SPA.

Deals can also be conditional upon third-party consents, such as those of key customers or distributors of the target, where required to preserve or extend their contracts with the target following completion. It is advisable to obtain such consents as CP to closing.

Another important aspect is obtaining waivers from banks and other contractual counterparties, as many facility agreements and other key contracts of the target typically include a change-of-control clause.

Where the seller is an individual, obtaining the consent in required form of the seller’s spouse or cohabiting partner is also commonly required as a CP, where the shares or quotas being sold form part of the spouses’ matrimonial property.

In Slovenia, where merger-control clearance or FDI screening or other regulatory notification or approval is required, the relevant clearance/decision is typically included as a CP to Closing (FDI sometimes even as condition subsequent) and not as a “hell or high water” undertaking.

In conditional deals with a PE-backed buyer, seller-favouring deal protection is used in Slovenia. Practice frames it as a contractual penalty for unjustified withdrawal, agreed at letter of intent (LOI) stage or later (including in the SPA), typically set as a percentage of transaction value – with no established market convention on the specific percentage.

Parties also often separately agree that a withdrawing party reimburses the other’s due diligence and transaction costs. Given that this operates as a contractual penalty (pogodbena kazen) under the Obligations Code, a court may reduce an excessively high penalty to a reasonable amount, so a very large percentage-based fee carries some risk of moderation if challenged.

Termination rights are typically granted to both the buyer and the seller under the SPA. Common termination triggers include failure to obtain required regulatory approvals, the occurrence of a material adverse change (MAC), and a material breach of the SPA or failure to satisfy a CP.

The longstop date depends on the complexity of the transaction. In the Slovenian market, it is typically set at six to 12 months following signing.

As regards risk allocation, certain distinctions can be observed between corporate-to-corporate transactions and transactions involving private equity investors.

On the buy-side, strategic purchasers may, compared with private equity-backed buyers, be more willing to accept certain transaction risks where these can be offset by anticipated synergies, operational integration or other strategic benefits. Private equity investors generally take a more disciplined approach to risk allocation and seek to ensure that material risks are appropriately identified, priced or contractually mitigated.

On the sell-side, private equity sellers generally seek to achieve a relatively clean exit and limit their post-closing exposure. They will typically provide customary warranties and indemnities but seek to manage their residual liability through negotiated caps, baskets, time limitations and, where appropriate, escrow or other security arrangements. By contrast, corporate sellers may be more willing to accept broader post-closing obligations, particularly where they retain an ongoing commercial relationship with the buyer or have other strategic reasons for doing so.

A PE-backed seller would typically provide customary title, capacity, authority and business warranties, together with specific tax and other indemnities for identified risks arising from due diligence. Specific indemnities cover known or disclosed risks, namely matters identified during due diligence or otherwise disclosed by the seller, such as tax, regulatory, employment, environmental or litigation issues, for which the buyer wants a direct, uncapped-style remedy rather than relying on the general warranty regime.

Liability is typically subject to a negotiated cap, generally in the range of 10–30% of the transaction value, together with de minimis thresholds and baskets. Separate and higher limits and longer time limits may apply to fundamental warranties and specific indemnities. Known matters disclosed to the buyer are generally excluded from warranty claims. Disclosure of the data room is commonly permitted to qualify the warranties, subject to agreed standards of disclosure and specific limitations. The management team does not usually provide warranties to a buyer on exit.

Warranty and indemnity (W&I) insurance is not yet a standard feature of Slovenian M&A transactions, although it has been sought more in practice in recent years especially in larger or more complex transactions, particularly as an alternative to escrow or purchase-price retention.

Escrow and purchase-price retention mechanisms are more established. Such arrangements are generally used to secure warranty and indemnity claims. Slovenian escrow arrangements are usually administered by a notary.

Post-closing disputes may arise in relation to warranty and indemnity claims, purchase-price adjustment and earn-out mechanisms, as well as restrictive covenants such as non-compete provisions. However, transaction-related litigation is not generally regarded as a significant feature of Slovenian M&A practice.

Public-to-private transactions remain relatively uncommon in Slovenia. Slovenian private equity transactions are predominantly structured as private-to-private acquisitions, involving founder-owned, family-owned or corporate-owned businesses.

The acquisition of a public company may be subject to the takeover regime under the Slovenian Takeover Act (ZPre-1). The takeover rules impose strict limitations on the conduct of the target’s management and supervisory bodies in Article 47 of ZPre-1 from the receipt of the notification of a takeover intent until the publication of the outcome of the takeover bid.

Transaction agreements between the bidder and the target and other arrangements commonly seen in larger public M&A markets are not typical in Slovenia, reflecting the relatively limited number of public M&A transactions and the small size of the Slovenian public M&A market.

Under the Slovenian Financial Instruments Market Act (Zakon o trgu finančnih instrumentov – ZTFI-1), shareholders of public companies are subject to disclosure obligations when they reach or exceed certain important thresholds of voting rights. The relevant thresholds are 5%, 10%, 15%, 20%, 25%, ⅓, 50% and 75% of all voting rights in the relevant public company.

For PE-backed bidders, particular attention should be paid to the aggregation of voting rights through controlled subsidiaries and other entities or persons whose voting rights are required to be aggregated under the ZTFI-1. The notification may also need to identify the relevant chain of control. The rules are therefore relevant where an acquisition is structured through a special purpose vehicle (SPV) or a wider PE group. Significant penalties may apply for non-compliance.

When submitting a takeover bid (mandatory above ⅓ of voting rights), a takeover intent must be published on the same day, notifying the target company’s management, the Securities Market Agency (ATVP) and the Competition Protection Agency (AVK). For mandatory bids, the deadline is three working days from the day the takeover threshold is reached. This is when the transaction becomes public knowledge.

Under Market Abuse Regulation, in public M&A, immediate disclosure of inside information is required, if negotiations affect the share price.

Under the Slovenian Takeovers Act (Zakon o prevzemih – ZPre-1), a person is required to launch a mandatory takeover bid upon reaching or exceeding one third of the voting rights in a target company. The mandatory takeover bid regime applies where the target is either a publicly listed company or an unlisted joint stock company with at least 250 shareholders or more than EUR4 million of total capital.

For the purposes of the mandatory takeover bid regime, ZPre-1 does not consider only the shareholding of an individual acquirer but also aggregates the holdings of persons acting in concert.

ZPre-1 establishes an indisputable presumption that (i) a parent company and its subsidiary, and (ii) subsidiaries of the same parent company, are acting in concert. In addition, ZPre-1 provides for disputable presumptions of acting in concert in certain circumstances, including where persons are connected by circumstances relating to the acquisition of shares, such as the timing and size of acquisitions or other circumstances indicating a common purpose.

The consideration under a takeover bid may be offered in cash, shares, a combination of both, or as an alternative allowing shareholders to choose between different forms of consideration. In practice, cash consideration is the most common form in Slovenia.

The Takeover Act (ZPre-1) stipulates that the price in a takeover bid must not be lower than the highest price at which the acquirer acquired shares of the target company in the 12-month period prior to the publication of the bid. Furthermore, the price must be equal for all shareholders.

ZPre-1 permits only limited conditions in a takeover offer. Certain conditions are mandatory, including where regulatory approval or consent is required for the acquisition and where newly issued shares are offered as consideration. The bidder may also specify a minimum acceptance threshold. In a mandatory takeover offer, the threshold may generally not be lower than 50% of the voting shares plus one share, subject to statutory exceptions.

A takeover offer cannot be conditional on the bidder obtaining financing. Before the offer is published, the bidder must obtain ATVP approval and demonstrate that the consideration is secured, including by depositing the required cash amount or providing a bank guarantee.

The scope for additional conditions to the takeover offer itself appears limited under ZPre-1, and any further conditions beyond those expressly addressed in the law should be assessed carefully in light of the applicable takeover rules and ATVP practice.

If the bidder does not acquire 100% of the target, its governance rights will depend primarily on the percentage of voting rights acquired and the target’s articles of association; 50% of voting shares will generally give the bidder control over ordinary shareholder resolutions. At least 75% of voting shares is required for fundamental corporate actions.

According to the Companies Act (ZGD-1), any legal transaction by which a target that is a joint stock company provides an advance or a loan for the acquisition of its own shares, or any other transaction with comparable effect (eg, guarantees, collateral, debt push down), is null and void.

Debt push down via merger, when the bidder holds at least 25% shares of the target, is allowed under ZGD-1, but subject to several very limiting conditions, due to which it is almost never used in practice.

If a bidder, following a successful takeover bid, obtains at least 90% of the voting shares of the target, they can adopt a resolution at the general meeting to transfer the shares of the minority shareholders to the majority shareholder within three months of the publication of the takeover bid outcome (squeeze-out). Minority shareholders in this position are treated equally to those who sold their shares during the takeover process.

Under Article 45 of ZPre-1, a shareholder that has accepted the first offer may withdraw from that contract and accept a competing offer once the competing offer is published. The Takeover Act does not specifically regulate irrevocable undertakings, and there is limited Slovenian practice concerning their precise scope and enforceability.

Equity participation by management is relatively common in Slovenian private equity transactions, when members of the management team are also existing shareholders or founders of the target. In such cases, management may retain or reinvest part of its existing interest alongside the private equity investor, allowing the parties to remain aligned following the transaction.

The management team’s interest will generally be a minority interest, as the private equity investor will normally retain control.

The parties typically agree the terms governing management’s continuing equity interest, including transfer restrictions, leaver provisions and the arrangements for the sale of management’s remaining interest upon the private equity investor’s exit.

Management participation is possible in Slovenian private equity transactions and may be structured through direct or indirect equity ownership, share or option-based incentive arrangements, or contractual bonus arrangements. Where “sweet equity” is used, management may participate in the equity upside on terms that provide an incentive linked to the value created on exit, with appropriate vesting, leaver and transfer provisions.

PE transactions may also involve seller rollover or reinvestment, whereby the selling shareholder reinvests part of the sale proceeds into the acquisition structure, often at a higher level in the SPV chain. This may be structured through equity, preferred instruments, shareholder loans or vendor notes. Such arrangements allow the seller to retain an economic interest in the business following completion and may be used alongside management participation.

Preferred shares and other preferred instruments are legally available in Slovenia and may provide preferential rights to shareholders. In this regard there is much more flexibility on what can be agreed if the target company is a limited liability company.

Vesting and leaver provisions may be included where management holds equity in a private equity transaction, although there is no established Slovenian market standard as to their use or structure. The terms are generally negotiated on a transaction-by-transaction basis and may be used to align management’s continuing participation with the expected investment period.

Non-compete, non-solicitation and confidentiality obligations are commonly considered where management shareholders sell their whole share or remain involved in the business following a PE transaction. The restrictions are generally tailored to the business, included in the shareholders agreement, and should be reasonable in scope, duration and geographic reach. Non-disparagement provisions may also be included, although they are less central.

Non-compete restrictions can be included in the SPA, shareholders’ agreement or other transaction documents, particularly where the management shareholder is also a selling shareholder and/or stays in the target.

For members of management who are also employees, post-employment non-compete restrictions are subject to specific requirements under Slovenian employment law. They must be agreed in writing, may last for a maximum of two years and must not unreasonably restrict the employee’s ability to obtain suitable employment. Compensation is generally payable during the restriction period by statutory defined minimum.

Management shareholders benefit from the statutory rights available to minority shareholders, including information rights and, subject to the relevant shareholding thresholds, rights to request a shareholders’ meeting and propose resolutions. These statutory rights may be supplemented by contractual protections in a shareholders’ agreement.

Management shareholders do not typically have broad veto rights over the business or holding structure. Where management retains a meaningful minority interest, the shareholders’ agreement may provide consent rights over certain reserved matters, but the private equity investor will generally retain control over key strategic and financial decisions.

Management does not typically receive a separate contractual anti-dilution right. However, shareholders generally have statutory pre-emption rights to subscribe for new shares in proportion to their existing holdings.

Management will generally not have the right to control the private equity investor’s exit. Shareholders’ agreements may include tag-along and drag-along provisions, but the private equity investor will typically retain control over the timing and structure of the exit, subject to those contractual arrangements.

The level of control exercised by a private equity fund will depend primarily on its shareholding and the contractual arrangements agreed with the other shareholders. Private equity investors will usually seek board appointment rights.

Shareholders’ agreements usually contain a list of reserved matters requiring the private equity investor’s consent. These may include:

• acquisitions and disposals;
• significant capital expenditure or borrowing;
• material changes to the business;
• mergers and other reorganisations;
• changes to the articles of association;
• capital increases or reductions; and
• other significant corporate actions.

Private equity investors will, where possible, generally negotiate enhanced contractual information rights in addition to their statutory shareholder rights. These may include:

• regular financial and management reporting;
• budgets and business plans;
• access to management; and
• information on material developments.

As a general principle, the private equity fund backing a majority shareholder is not liable for the obligations or actions of the portfolio company, which has separate legal personality and is responsible for its own obligations.

The doctrine of lifting corporate veil is an exception to the general rule pursuant to Companies Act (ZGD-1), which is in practice used restrictively.

Usual shareholder rights, reserved-matter consent rights, board appointment rights or strategic oversight would not, in themselves, give rise to such liability.

In the Slovenian market, the predominant private equity exit route remains a private sale, most commonly to a strategic buyer or another financial investor. Other exit structures, such as management buyouts or partial disposals, may also be used but are less common. IPO exits remain highly uncommon in Slovenia.

Dual-track processes, where an IPO and private sale are pursued in parallel, are not typical in the Slovenian market. Triple-track processes, adding a parallel recapitalisation, are even less common.

Rollover or reinvestment arrangements may be agreed in individual transactions, particularly where there is a continuing commercial rationale for the seller to retain an interest, but are not considered to be an established or uniform feature of Slovenian private equity exits.

Drag-along and tag-along rights are commonly included in Slovenian private equity shareholders’ agreements.

In practice, drag and tag provisions are typically negotiated as part of the investment/shareholders’ agreement and are expected to apply on an exit or change-of-control transaction. There is no established Slovenian market standard for the precise triggering threshold. Drag rights are generally structured so that the private equity investor can exercise them once it has obtained the requisite majority or investor consent under the shareholders’ agreement, while tag rights may be triggered by a proposed transfer of a controlling or substantial interest.

Management shareholders will typically benefit from tag rights and will be subject to the investor’s drag rights. Institutional co-investors may have more extensive or separately negotiated exit protections, depending on their position in the investment structure and their relative bargaining power.

See 10.1 Types of Exit.