Management Buy Outs
The success of a business is very much down to its employees. Therefore, when the owners of a business are considering their exit plans, a sale to the senior management team can be an attractive proposition compared as an alternative to a trade sale or a sale to private equity.
Benefits can include:
- It enables the existing managers to acquire the business without the need to inject a significant amount of personal money.
- It assists with the continuity of the business and maintains the company ethos and values.
- An MBO can be quicker and cheaper to implement than the alternatives.
- The contracts and sales process itself for MBOs are usually much simpler as the buyers already have intimate knowledge of the company and so minimal due diligence is required.
- In general, companies purchased through an MBO have a higher chance of ongoing success and profit than those that have been bought by an external buyer.
At HURST we have an established track record of supporting business owners and management teams through an MBO. Working alongside our corporate finance colleagues we can help in several ways including:
- Helping design a new structure to suit the needs of the current owners and senior management team, both from tax and commercial perspectives.
- Undertaking a valuation of the business to establish the market value, and reviewing the financials to determine the affordability of a deal and the time frame over which any deferred consideration can be paid.
- Helping secure funding where required.
- Submitting HMRC clearances.
- Inputting into, and review of, legal documents, and warranties and indemnities.
We work with your chosen lawyers and other advisors to ensure that the deal process is as smooth as possible.
Please get in touch to hear how we can help with your MBO.