What is a management buyout?
A management buyout is when an existing management team purchases the business they already run. Typically, these company sales involve financing through a combination of personal investment, external funding and bank loans.
How to do a management buyout
The management buyout process can be relatively straightforward with the right advice and planning. First, the management team should establish if there is an appetite to sell the firm, or the existing owner should see if the management team is interested in buying it.
If both parties are willing to do a deal, a business valuation should next be completed to help agree on a fair deal. Financing will then be secured by the management team before legal and financial advisors oversee the transaction to completion.
When should I consider an MBO?
As a buyer
You should consider an MBO as a buyer if you are part of a leadership group that wants to take greater control of your company’s future. It allows you to build long-term value and capitalise on your insider knowledge of the firm.
As a seller
You should consider an MBO as a seller if you are ready to step back while ensuring the enterprise remains in safe and trusted hands. Some reasons you may be stepping back include retirement, burnout or if you are seeking a new venture.
How can management buyout advisers support my succession planning or business acquisition?
Selling a business to a management team or employees can be a sensitive process, requiring discretion and careful negotiation. Professional advisors can help manage discussions, arrange independent valuations and structure a deal that works for all parties.
On the other side, if you are interested in purchasing a firm in an MBO, buyout advisors can help by sourcing funding, preparing a robust business plan and guiding you through any legal disputes. This support can increase the chances of a successful acquisition.
An experienced MBO advisor provides independent valuations, sources the right funding and manages negotiations discreetly, ensuring both buyers and sellers achieve a fair outcome while preserving business continuity and long-term success.
The advantages of completing an MBO with Eddisons Business Sales
We understand that MBOs can be tricky deals to navigate. However, Eddisons Business Sales can make the process significantly easier. Here are a few reasons you can depend on us:
- Our past clients rate us highly after using our services
- We have more than 75 years of industry experience
- Our experts can value your business prior to sale
- We are backed by the Financial Conduct Authority (FCA)
Discuss your management buyout needs with us today
If you are considering a management buyout, now could be the ideal time to explore your options. Our team is here to simply advise or broker a deal that meets the needs of all involved. Get started today by calling 0113 340 9840 or completing the form below.
Get in touch with Eddisons
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Frequently asked questions about management buyouts
What is the difference between a management buyout and a leveraged buyout?
Management buyouts are when existing managers purchase a business, often with some level of external debt. Leveraged buyouts, on the other hand, are led by outside investors using significant amounts of borrowed capital.
