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Management Buy Ins & Buy Outs (MBOs, MBIs & BIMBOs)

A Management Buy-Out (MBO) is the purchase of a business by its management team and can range from small family businesses to subsidiaries and divisions of large quoted companies. MBOs are generally perceived as low risk, as managerial knowledge of the business should ensure minimal disruption during the sales process.

A Management Buy-In (MBI) is where a manager or management team from outside a company purchase the business. This scenario is considered more risky as the incoming management team will be less familiar with the business acquired. To attract funding, MBI teams must have a sound strategy and be able to demonstrate the ability to deliver their plans.

A combination of the two, a Buy-In Management Buy-Out (BIMBO), reduces the risk of the MBI while bringing additional skills to complement the incumbent management team.

Sterling can assist with key issues such as negotiating the best deal, raising finance, and managing the deal through to completion. Our help can ensure that the price and financial structure you agree is sensible and affordable.

Process:

  • Find acquisition target (if appropriate)
  • Develop and prepare valuation based on financial projections
  • Present bid to potential vendor
  • Negotiate deal
  • Determine most appropriate funding structure
  • Approach and negotiate with funders
  • Project manage deal to successful completion