A management buy-out ("MBO") involves the acquisition of a company by the management team. An acquisition like this is often supported by private equity investment and/or debt financing.
The management (buyer’s) perspective
We regularly advise on MBOs from the management's perspective on the following:
- the scope of warranties which management may have to give as part of the process and the related disclosure exercise;
- the typical terms for their equity investment;
- guiding the management team through the often-tricky exercise of reconciling their participation in the MBO with their existing duties as directors and employees; and
- advising, in conjunction with the lawyers in our employment team, on any new employment arrangements.
The business owner (seller’s) perspective
We also act for sellers who have decided to sell a business to their management team.
A management buy-in ("MBI")is similar to a management buy-out, but in this instance, the managers or a management group from outside the company lead the acquisition.
Whether you are selling your interest in a business to a management team, or acting for the incoming management team on the acquisition, we can guide you through the process.