What is a management buy-out (MBO)?
An MBO is a corporate finance transaction where a company’s management team combines resources to purchase all or part of the company they manage. The management team can then use their expertise to grow the business and generate a return on their investment. MBOs typically occur when the current majority shareholder wishes to retire or wants to exit the business.
An MBO can be attractive to the current owner as they can be assured of the commitment of the current management team. Plus, an MBO also limits the number of external parties that confidential information needs to be provided to.
What is a management buy-in (MBI)?
An MBI occurs when an external management team acquires a controlling interest in another company. This external team is introduced to either supplement or replace the existing management team.
This may be appropriate in situations where it is felt that the external management team will contribute additional skill sets. The purchasers will usually have experience of the sector in which the business operates and may even be serial entrepreneurs who have the backing of their own funds.
Our MBO & MBI services
At Rayner Essex, we will work on behalf of either the existing shareholder or the MBO/MBI team to put forward suitable proposals and evaluate those received, ensuring that the transaction proceeds successfully. Our services include:
- Commenting upon or undertaking a valuation of the business
- Proposing the structure of the deal
- Suggesting suitable financing proposals
- Considering taxation aspects for the new and existing shareholders
The benefits of choosing Rayner Essex
We have a team of highly experienced individuals that will be available throughout the process. With over 50 years of experience in accounting, we are equipped with the sound knowledge and judgement which has made us a trusted name for countless businesses. We offer a personalised approach, which is partner-led, to guide you through this important stage of your business.
Our corporate finance team will work with you through project conception, raising the necessary finance, executing the strategy and beginning the next stage of your business.
Meet our experts
Third in a series of webinars in support of business owners for all stages of the business lifecycle. Whether it is take off, growth, exit or an emergency landing, each webinar will cover all you need to know.
In this article we are exploring some of the options available to you when you decide to exit your business. You have created a business and lifestyle that is a going concern, but it is time for you to pass on the reins, sell the business, retire, or just do something else. There is much to consider, let’s take a look at the options…
Antony Federer shares his outlook for new business start ups and restructuring for 2021 and beyond.