Management Buy-Out (MBO)

An MBO can be a highly effective means of achieving ownership succession for a business. For business owners it can provide an effective exit solution in circumstances where a trade sale may not meet all of their objectives. And for an ambitious management team it is an opportunity to share in the benefits of ownership.

Imperium advises management teams who believe an MBO may be viable, or in situations where the transaction is prompted by the owner of the business. This includes negotiations with the business owner, diffusing what may otherwise be a source of tension between management and shareholder. Ordinarily our role would include the following:

  • Initial evaluation of the potential MBO to assess viability
  • Discussions with the shareholder(s) to understand their preferred objectives
  • Assessment of funding requirements and discussions with prospective funders
  • Structuring of purchase consideration to best suit management team objectives and negotiation with the shareholder
  • Negotiation with providers of finance to obtain most suitable funding
  • Overseeing due diligence to suit management team and funders
  • Final negotiation with funders and the vendor as well as project management to completion

An MBO can be an exciting proposition. Imperium works to ensure that the management team get the best possible result, with a full understanding of the potential risks involved.