Management buy-outs and buy-ins, from structure to funding.
We advise on and structure MBOs and MBIs, including the funding, helping management teams become owners.
In a management buy-out (MBO) the existing management team buys the business it runs. In a management buy-in (MBI) an external team buys in and takes over. Either way the team usually needs to fund the purchase with a mix of its own money and outside capital.
Our role is to value the business, design a structure the funders will back, negotiate the terms and advise on the funding, with the tax consequences for both sellers and buyers worked through from the outset.
What we do on an MBO or MBI
- Business valuation and financial modelling
- Transaction structuring and financing
- Preparing and negotiating term sheets
- Advice on funding the transaction
Who this is for
- Management teams who want to buy the business they run
- Executives or investors looking to buy in to an established company
- Owners who would prefer to sell to their own team
What is the difference between an MBO and an MBI?
In an MBO the buyers are the existing management team. In an MBI the buyers are an outside team who will take over the running of the business.
How is a management buy-out funded?
Typically through a combination of the management team’s own investment and external capital such as debt or equity from investors. The right mix depends on the business’s cash flow and the size of the deal, and we advise on both sources and mix.
Do I need to tell the owner I am interested?
Normally the first step is a confidential, well-prepared approach. We advise on timing and how to approach the owner so that the business is not unsettled.
Why use an advisor on an MBO?
A buy-out involves valuation, funding, tax and negotiation at once, and the team is usually still running the business. An advisor takes the transaction workload and gives funders confidence in the plan.
This page is general information and is not advice. Speak to an advisor about your circumstances before acting.
