Management Buy-outs Buy-ins

Management Buy-outs Buy-ins

Often the most suitable way for a major stakeholder to exit the business or take out a significant amount of capital value, is for the business to be subject to a management buy-out (MBO) or buy-in (MBI).

A MBO offers an attractive succession plan, providing continuity of management and avoiding the requirement to provide confidential and commercial information to competitors in the industry. A MBO is often an appealing option for retiring owners, provided there is a clear track record of sustained normalised earnings and a strong, motivated management team with a vision for the future direction and growth of the business.

Key Contacts

Paul Ashton

Client Partner, Beavis Morgan

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Peter Drown

Senior Partner, Beavis Morgan group

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A MBI may be more appropriate if the existing management team lacks the depth of experience and quality. Typically a MBI introduces a new chief executive, but it can be a completely new team. A MBI is similar to a MBO in all other aspects, although an incoming team will not have the depth of knowledge of the business as a MBO team. However, a MBI team would be expected to have relevant industry knowledge and experience and a clear vision for the future of the business.

Both MBOs and MBIs are complex transactions and usually involve private equity finance and debt. These transactions need professional project management which Beavis Morgan is well placed to provide, so that the transaction is completed as smoothly as possible and minimising any adverse effects on the business.
Beavis Morgan can assist you with each stage of the process, enabling the business to continue running with minimum disruption.

Our services include:

Assessing the feasibility of an MBO/MBI
Valuing the business to be acquired, assessing the financial structures that would be viable, the deal structure and the requisite taxation planning
Assisting in preparing the business plan and financial projections
Assisting in raising the finance
Negotiations with both the vendors and financial backers
Financial due diligence on the target business
Project managing the transaction from inception to completion
Assisting the exiting stakeholder(s) with taxation and investment advice in respect of the disposal proceeds