For the management and senior executives who have put their life and sole into their company, protecting and owning it may become an attractive solution for future security and independence.
Launching a Management Buy-Out (MBO) is a leveraged acquisition, using the assets of the target company to raise the money for the purchase. An MBO will ultimately require financial sponsors or private equity. Where the management may struggle to raise this initial acquisition capital, we can raise capital secured on the target company assets and look to the target company’s cash flow to secure interest and repayment.
Leveraged buy-outs are now common practice. In recent years we have seen the age of the mega-buy out where company’s have been bought and sold for hundreds of billions of dollars. Regardless of the amount, the principal remains the same.
The goal of any MBO will be to strengthen the managers’ interests in the success of the company. MBO’s have assumed an important role in corporate restructurings beside mergers and acquisitions.
It is important to consider various factors when entering an MBO position; Fairness to Shareholders, Share Price, the future business plan and legal and tax issues.
In order to ascertain the requirements of launching an MBO, it is important to hold a perfect understanding of your company, its shareholders, employees and customers. An expert overview is essential.
For financing, restructuring and launching the initial steps toward an MBO, please contact us in the strictest confidence where our team of expert financiers can advise you on every step of the process and begin to lay the building blocks of a successful MBO launch.