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 buyouts page.
What is a management buyout (MBO)?
An MBO allows you to take over the company you’re working for. This is a popular option because it makes you the owner of an established company you care about. 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 – a good corporate finance adviser 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 (MBI) is similar to a management buyout but offers a unique solution. The key difference between Management Buy Outs and Management Buy ins 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.
If you’re looking for more information, take a look at our FAQ page.
How does the management buyout (MBO) process work?
We’ve explained management buyouts in eight steps, so you know what to expect and how we can help: