Management Buyouts (MBOs)

What are the keys to a successful MBO?

The key elements of a successful MBO are:

• A strong management team
• A company with a track record of profitability
• A willing vendor with realistic price expectations

How can we help?

An MBO will often take six to nine months to complete if external funding is raised. Our team can guide you through the entire process which can often include:

• Advising and reaching an agreement on a fair and reasonable valuation
• Drafting a business plan, including integrated financial forecasts, on behalf of the management team to raise the required funding
• Securing the best and most cost-effective debt and equity funding
• Coordinating other advisors, including legal and tax
• Overseeing any due diligence required by the funders
• Overseeing the legal process from a commercial perspective
• Minimising the impact and disruption to the business

What are the benefits of an MBO?

For the owners:

• It is a controlled process for the vendor – including timing, conditions, and post-completion involvement
• Once the price and deal structure are agreed, they very rarely fail to complete
• Business sensitive information is kept confidential i.e. not selling to a competitor
• It is low risk
• It secures the future for the business

For management:

• They can take ownership of the business they help run
• There is the potential for high returns
• There is limited risk

How we can help

Completing an MBO successfully involves several stages, each requiring careful planning and expertise. Our team can guide you through the process, from evaluating whether an MBO is the right option, all the way through to legal completion.

With experience in advising both vendors and management teams on MBOs since 2008, our Deal Advisory team is well-placed to guide you through the intricacies of your transaction.

If you’re a business owner considering a Management Buyout as an exit option, or if you are member of a management team looking to explore your options, get in touch with a member of our team below for a no-obligation exploratory discussion.