Management Buy-Out (MBO)
In the case of a management Buy-Out (MBO) the form is acquired by the present management. The process of a MBO has specific characteristics due to the existing relation between acquirer (employee) and seller (employer). Clear agreements should be made in advance of the process.
The lack of a successor within your family, a certain part of your company is no longer part of your main activities or the need to sell a part of the company in order to grow; these are examples where selling to the management offers a solution.
Even though a MBO doesn’t always yield the maximum amount financially, this sort of transaction is often a good option. The current management knows the company very well, what makes the transaction easily to finance. Important is to see what ideas the management has with the company when selling the company.
For the management a MBO is the best opportunity to become an entrepreneur, because they know the company and the market as no other, which limits the risk of entrepreneurship. When facing a MBO important issues are putting together a balanced management team, creating a solid business plan and finally financing the transaction. Experience tells that MBO processes should be handled pro-actively and structured.
The directors of AenF Partners has recently successfully assisted in many MBO’s for both acquirers and sellers.