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Management Buy Outs (MBOs) and Management Buy Ins (MBIs)

A Management Buyout (MBO) can present a significant opportunity for a management team and an appealing alternative to a trade sale for the vendor.

It is an exciting opportunity for the management team to take control of the business they are in and drive it forward.  An MBO is also technically complicated, time consuming and can expose the management team to a completely new level of risk.

From the vendors’ perspective, it is often easier to sell to the management team, while the due diligence process is more streamline and there is no need to market the company to competitors.

For a strong management team, the prospect of taking control of the business represents a life-changing opportunity to determine their own destiny.

  • We can work with the management team to appraise the feasibility of the MBO considering both the opportunity and the risks before they commit to the buy-out process. In particular, we can establish at this early stage whether the vendor's price expectations make sense as well as the prospects for the MBO team being able to fund the purchase.
  • We assist with the most difficult aspect of any MBO which is “opening up” the opportunity.   Management will recognise that an owner approaching retirement will need an exit at some point, but a number of issues must be addressed with great sensitivity.  These include questions such as: Who should make the initial approach?  What about timing? And are there dangers even in raising the issue?
  • Our specialist Corporate Finance team has significant experience of buyouts as well as buy-ins.  We can spot the key issues for both sides and structure a deal, using professional diplomacy and objectivity without creating an adversarial situation.
  • We produce an indicative valuation of the business, to ensure that the price expectations of the vendor and structure of the deal are viable.  Next, we apply our expertise to create a presentation to potential funders.
  • An MBO requires funding to buy the business, as well as for working capital and we use our solid relationships with banks and equity providers to progress negotiations smoothly and transparently.   This means we manage the transaction throughout the fund raising process and bring matters to a mutually beneficial fruition.
  • Our work also brings us into contact with Management Buy-In opportunities and we are always interested to hear from experienced business managers, with a proven track-record, looking for such opportunities.

For more information contact a member or our team below:

Regulated by the Institute of Chartered Accountants in England & Wales for a range of investment business activities
MC Vanguard Corporate Finance is the trading name of MC Vanguard Corporate Finance Limited
Registered in England & Wales No. 7862991 Registered Office: 5 Temple Square, Temple Street, Liverpool, L2 5RH

MBOs and MBIs

A Management Buyout (MBO) can present a significant opportunity for a management team...

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