Management buy out
We make it happen
A management buy out (MBO) is the purchase of a company or business by all or some of its existing management and we have had extensive experience in helping support management teams through the process to a successful conclusion.
MBO’s can be notoriously difficult to negotiate due to the many parties involved, but over the years we have crafted a proven approach that helps to streamline the process and minimise the cost.
The post-recession environment has changed the requirements for many MBO’s and the reality is that:
- The management team will be required to make a meaningful investment in the acquisition.
- The seller may be required to fund a considerable proportion of the price through deferred consideration or an earn-out.
- Valuations are lower than they used to be.
- Banks are much more focussed on security. If you can secure cash flow lending, then the repayment terms may be quite onerous. It’s likely that a greater proportion of equity will be required and you may have to resign yourself to selling a good proportion of equity to a venture capitalist.
That said, good deals can still be done if you work with the right adviser.
