Management buy-out (MBO) and management buy-in (MBI) are complex yet exciting transactions that need professional project management to ensure that they are completed smoothly, without any negative effect on the business.
How has the Covid pandemic impacted Management buy-outs?
The impact of COVID-19 has seen a reduction in the number of MBOs taking place. However, equity and debt funders are awash with cash from prior fundraises and their appetite to invest remains very strong, meaning it’s a perfect time for an MBO team to source funding
Management buy-outs explained
For an exiting owner, an MBO will offer an attractive succession plan, as there will be continuity of management and no requirement to disclose confidential information to outside parties. An MBO is an attractive option for businesses with retiring owners, a track record of profitability and a strong, motivated management team with a clear vision of the future direction for the business.
What about Management buy-in (MBI)?
An MBI is similar but the management team is external to the business. The risks are different, as MBI teams will not have the same detailed knowledge of the business, but the latter could potentially have gained sector experience and could therefore identify the potential a business has to generate good returns to its shareholders.
“Menzies’ involvement in the buy-out process was instrumental in ensuring its successful completion – not only was the management team offered excellent commercial advice on the terms of the buy-out and assisted with the raising of the required finance, but also we were provided with the emotional and professional support throughout to help us get through what is, in reality, a very difficult and exhausting process”MD, Recruitment Group MBO Team
How can we help with your MBO/MBI?
We can assist you with each stage of the process (which typically takes takes 6-9 months), offering sound commercial advice and support, enabling you to remain focused on running the business. Our hands on approach, includes project managing your MBO process from start to finish, allowing your management team to keep a close eye on the business.
- Valuation of the business to be acquired, deal structure and tax planning.
- Assessing the viability of the proposition.
- Preparing a business plan and financial projections.
- Structuring the business.
- Raising capital.
- Negotiations with vendors and financial backers.
- Project management of the transaction throughout.
“Menzies proved both highly professional and commercially astute in their approach to the acquisition – they not only reported within exacting deadlines but gave valued advice in protecting our interests.”Divisional CFO – Listed international mobile products and marketing services group
Make a confidential MBO enquiry
We understand that undertaking an MBO process is a sensitive process, so for a confidential call-back or information request please submit your MBO enquiry below