Advantages of a Management buy-in (MBI)
One advantage of a Management buy-in is that bringing in a new management team introduces fresh perspectives and new ideas to the business. This can be particularly beneficial as the new team may bring diverse levels of expertise and experience, which can lead to improvements in business operations and performance.
Since an MBI is an external acquisition, there may be a larger pool of potential buyers if the business is seen as a profitable investment. High demand for the business can increase its value, potentially driving stronger competitive tension and a more attractive price for the selling shareholders.
Disadvantages of a Management buy-in (MBI)
During the due diligence process, the new management team will thoroughly review the company’s records, including its confidential and sensitive information. If the external team is a competitor, there is a risk that they could use this sensitive information to their advantage, leading to a potential data leak.
