A Management Buy Out (MBO) is the purchase of a business by the existing Management, usually in co operation with external financiers who provide the necessary funding to satisfy the transaction.
MBO’s vary in size, scope and complexity but the fey feature is that the managers acquire an equity position in the business, sometimes a controlling stake, for a relatively modest personal investment.
Often the Group of managers establish a new holding company, which then effectively purchases the shares of the target company.
Avantia Corporate Services team of experienced transaction advisors can represent either the Management Team contemplating the acquisition or the current Owner of the business and work with both groups to bring the transaction to a satisfactory conclusion for all parties.
The option to go the MBO route depends on some critical factors:
- Does the business have a sound and well balanced management team?
- Is the business viable as a stand alone entity?
- Is the current major Shareholder (majority interest of 51%+ of Shareholder equity) and the Management Team willing to move towards an MBO transition?
- Will the business be offered at a realistic price ( Is an Independent Valuation required) ?
- Is the MBO structure capable of supporting an appropriate funding model?
If the answers to these questions are posative an MBO is a real possability. Avantia Corporate Services key transaction advisors are able to work with either party to evaluate the feasability prior to entering into a structured program.
Using our 13 step, proprietary MBOGO™ program we are able to outline the steps and activities required to complete the MBO process.
For a confidential ‘no obligation’ chat over a cup of coffee as to the possability of an MBO in your organisation please call our office on (07) 30109711 to arrange a time to meet.
|