SearchManagement Buy Outs
Turn your management team into owners. A Management Buy Out (MBO) is when a company's existing management team buys the business from its current owners. HURST Corporate Finance advises both management teams and exiting shareholders across Greater Manchester, the North West and the wider UK — structuring the deal, sourcing the funding and guiding everyone through to completion.
For an owner, an MBO can be an attractive exit: you sell to people you trust, protect the business you've built and secure its legacy and jobs. For a management team, it's the chance to own and lead the company you already run. Either way, our partner-led team manages the process end to end, balancing the interests of both sides to reach a deal that works.
Success Factors
- Effective management team with the desire for ownership and ability to execute future strategy.
- A commercially viable business with a track record of profitability and cash generation.
- Willing seller with realistic price expectations.
- Robust business plan which demonstrates the business can service the funding required.
- Future exit opportunity to enable investors and management realise their investment.
An MBO provides an attractive option for a business owner looking for continuity and stable succession. It also provides management teams with the opportunity to make significant capital gains from what can be relatively modest initial investments.
Typical MBO scenarios
- Retirement of owners (of privately owned company)
- Non-core subsidiaries sold to realise cash to invest in core activities
- Financially distressed groups needing to raise funds
- Businesses in insolvency sold as a going concern
- Institutional owners (e.g. private equity funds) wanting to realise their investment
How we can help
- Advise you on the feasibility of an MBO
- Lead negotiations with the vendor
- Help you to complete your business plan
- Help you to raise funding
- Project manage the process on your behalf
Frequently asked questions about management buy outs
What is a management buy out (MBO)?
A management buy out is when a company's existing management team buys the business from its current owners, becoming the new shareholders. It's a common way for owners to exit while keeping the business in trusted hands, and for managers to take ownership of a company they already know well. MBOs are usually funded by a mix of management investment, bank debt and deferred consideration.
How is a management buy out funded?
Most MBOs combine several sources: a personal investment from the management team, senior debt from a bank, and often deferred consideration where part of the price is paid to the seller over time. Private equity or asset-based lending may also feature on larger deals. An adviser structures the funding so the deal is affordable for management and acceptable to the seller.
How much do managers need to invest in an MBO?
Management teams rarely fund the whole purchase price themselves — that's what external funding is for. Personal investment varies with deal size and the funders' requirements, but it's usually a meaningful sum that demonstrates commitment rather than the full value. The right structure lets a committed team acquire the business without needing personal wealth to match the price.
What's the difference between an MBO and an MBI?
In a management buy out (MBO), the existing management team buys the business they already run. In a management buy in (MBI), an external management team buys in and takes over. A "BIMBO" combines both — existing managers and incoming ones buy the business together. HURST advises on all three structures.
Why would an owner choose an MBO over a trade sale?
An MBO lets an owner sell to people they trust, protects the culture and jobs they've built, and often allows a smoother, more confidential process than marketing the business to competitors. It can also enable a phased exit. A trade sale may achieve a higher headline price, so the right route depends on whether value, legacy or certainty matters most.
How long does a management buy out take?
Most MBOs complete within around three to six months once the management team and owner agree to proceed, though this varies with funding complexity and due diligence. Because the buyer already knows the business, an MBO can move faster than a third-party sale — but arranging finance and legal completion still takes time. Early preparation keeps the process on track.
What are the tax implications of a management buy out?
For the selling shareholders, an MBO is a disposal that usually attracts Capital Gains Tax, with Business Asset Disposal Relief potentially reducing the rate on qualifying gains up to a £1 million lifetime limit. The BADR rate rose to 14% from 6 April 2025 and increases to 18% from 6 April 2026. Structuring matters for both sides, so take integrated tax advice early. BDO
How can HURST help with a management buy out?
HURST's partner-led corporate finance team advises both management teams and exiting owners on MBOs — from assessing feasibility and valuing the business to structuring the deal, sourcing funding, managing due diligence and completing the transaction. Working alongside our in-house tax specialists, we deliver a deal that works for both sides.
Contact us
Email us imagine@hurst.co.uk or call 0161 477 2474.
