Management Buyout (MBO)

A management buyout (MBO) is a particularly enticing avenue for management staff as it offers high potential rewards from taking ownership of a business

A management buyout (MBO) is a particularly enticing avenue for the existing management staff as it offers high potential rewards from taking ownership of a business as opposed to continuing as employees. The process is a common exit strategy for large corporations who wish to pursue the sale of divisions that are not part of their core business, or by private businesses where the owners wish to retire.

It is important to recognise the difference between an MBO and an MBI; the latter is where external management team acquires a company and replaces or enhances the existing management team. The clear advantage with an MBO is that the team planning the acquisition are familiar with the company with no learning curve or transitional period required, and can easily maintain existing business relationships. However, there maybe a skill gap left by the departing owner.

BTG Advisory has facilitated numerous of MBOs across a variety of deal sizes and sectors and has a highly experienced team of professionals dedicated to providing creative, independent and honest advice to our clients throughout the UK.

We are also highly versed in MBO's of family businesses, which can often be a more emotive process. From the current owner's perspective, succession planning and crystalising equity are two key areas that need thorough support and guidance; something our specialists can provide. If succession is the appropriate course, the next leaders of the business need to be identified and trained. If there are no natural successors and an exit is planned you need to ensure you maximise the value of your business at the point of exit. 

Every transaction is partner-led, ensuring that years of experience and knowledge of wide-ranging potential transaction issues and complexities is put into practice to deliver a successful outcome for our clients.

Our significant experience of souring appropriate funding solutions for MBOs gives us the in-depth knowledge of the available financing structures and their appropriateness to different circumstances. We view it as our responsibility on every transaction to ensure that the source and structure of financing is relevant to our clients’ business needs, both now and in the future. This often involves identifying creative solutions.

We offer strong and impartial advice throughout this often sensitive process – for more information or a free consultation, contact BTG Advisory today.