A management buy-out (‘MBO’) has many similarities to a partial exit. It allows founding shareholders the option to exit, or, partially exit the business whilst enabling the management team to participate in the equity growth of the business going forward.

 

These transactions tend to be complex with numerous parties involved. Often founding shareholders are both buyers and sellers and individual objectives frequently differ between various shareholder groups.

 

Management buy-ins (‘MBI’) are usually even more complex given the lack of internal knowledge of the business by the buy-in team seeking to lead the transaction. MBO’s and MBI’s are therefore often combined into a Buy-In Management Buy-Out (‘BIMBO’).

 

We have personally led several MBO’s and we can therefore explain every stage of these processes.

 

Our role will include:

 

• Review of the current operating performance of the business and future opportunities available

• Identification of and approach to suitable acquisition targets (in the case of MBI’s)

• Valuation of the business

• Advice on the viability of the transaction

• Assessment of the complementary skills of the management team and identification of any gaps

• Preparation of an Information Memorandum (Business Plan) and work with the team in completion of financial forecasts

• Management of discussions with the vendor(s) and their advisors

• Negotiation of the purchase terms and price

• Introductions to potential funders so as to raise the most appropriate sources of finance to fund the MBO/MBI/BIMBO

• Guidance on technical issues of the process

• Co-ordination of all other professional advisors

• Pro-active project management of the transaction through to a smooth and timely completion