As a senior manager, you’ve scaled the ladder and steered your company true. You’ve proved your ability tenfold and now you’re ready for the next step: business ownership.
Management buy ins and buy outs – or an MBO or MBI, can give you the opportunity, and all the independence, recognition and reward that comes with it.
Are you a business owner selling to management? If so, go to our succession planning and succession management buyouts page.
What is a management buyout (MBO)?
A management buyout allows you to take over the company you’re working for. An essential aspect of a successful MBO is determining the optimal management buyout structure, which outlines how the transaction is organised and financed. For example, in a family-run business, a family buy out can allow the company to pass from an older generation to the new generation, all whilst allowing the older generation to extract some business capital.
An MBO is very flexible – our Cambridge-based corporate finance advisers can structure a buyout to suit your needs and capabilities. You have plenty of options for funding an MBO, too.
For example, a leveraged management buyout uses assets in the company as collateral, while loan notes are essentially an IOU to the owner. Or you could consider raising finance from a bank or private equity firm.
As well as giving managers a once-in-a-lifetime opportunity, an MBO can be attractive to the existing owner too. Among other reasons, they may feel happier leaving their company in the hands of a team they know and respect.
What is a management buy in (MBI)?
A management buy-in is similar to a management buyout but offers a unique solution. The key difference between a management buy out and a buy in is that you will be buying out a business you’re not currently working for. You might choose to do an MBI if, for example, your company’s existing owner doesn’t want to sell up.
An MBI is very flexible – our team of Cambridge-based corporate finance advisers can structure a buy-in to suit your goals and capabilities.
If you’re considering a management buy-in and want to explore how it could work for your business, our team is here to help. Contact our advisers today via our contact page to discuss your options and the right structure for your situation.
What is the difference between an MBO and MBI?
The key difference between a Management Buyout and Management Buy-In lies in who is acquiring and running the business.
- An MBO is when the existing management team of a company buys the business they currently manage.
- An MBI is when an external management team or individual buys into a company and replaces the existing management.
If you’re looking for more information, take a look at our FAQ page.
How does the management buyout (MBO) process work?
