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Management Buy Outs (MBOs)

A Management Buy Out (MBO) can provide management teams with the opportunity to acquire a significant capital sum through the acquisition and ultimate disposal of their own business.

The potential reward does not come without a significant element of risk, whether that is the commercial risk of management succession, separation from a larger corporate or the financial risk associated with the purchase price and funding structure.

Our integrated deal advisory and legal team will be involved from day one, ensuring, where possible, all risks and hurdles are assessed and addressed up front. This integrated approach provides more certainty on every transaction.

We lead all negotiations with vendors and will only recommend that a client proceeds with a transaction if we consider the purchase price and deal structure to be reasonable, and we know that we can source an appropriate, robust, funding structure.

Working closely with the management team, we will coach you through the entire transaction. We will also approach a number of potential providers of debt and equity funding as the working relationship between funder and the client can be just as important as the funding advanced on day one.

When working to prepare the MBO funding document we will help to identify the commercial risks associated with the transaction and develop a meaningful action plan which will address these issues. Our approach ensures you are kept up-to-date and time is not wasted as the deal progresses.

What Can You Do?

  • Maintain a relationship with the vendor
  • Know and understand your directors’ duties
  • Bring in appropriate management
  • Choose the right funding partners
  • Question whether you really want to own a business?
  • Determine whether you can lead. Are you ready to switch from employee to owner?
  • Stay involved in the transaction – don’t pass it all to your advisors
  • Continue to deliver results, don’t take your eye off the business
  • Know how long you want to be owners, match funders to you
  • Take guidance – this isn’t your day job, use your advisors' experience

 What Will We Do?

  • Talk to you on a free, no-obligation basis and assess your situation
  • Propose the next move
  • Appraise the project and challenge assumptions where necessary
  • Give an independent view on the pricing of the business
  • Devise the funding structure
  • Produce a funding document
  • Produce financial forecasts and perform sensitivity analysis
  • Make introductions to funders
  • Negotiate deal terms
  • Identify Key Performance Indicators and help to develop reporting systems if appropriate
  • Manage the project through to successful completion

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