If you part of a senior management team looking to acquire equity either through management buy-in (MBI) or management buy-out (MBO), we provide you with tailor-made solutions. Our in-house experts as well as business associates help you realize your dreams all through the critical stages of ownership transfer without a hitch.
A management buy-in or MBI is the purchase of majority equity of a company by outside managers and the take-over is likely to be backed by PE (Private Equity) investors. The external managers intend to run the business since the existing management either lacks expertise to conduct business efficiently or funds to 'buy majority equity out' from within. There can also be succession issues – for example in family run businesses – lack of leadership among the present owners may trigger a MBI.
A MBI is perceived as a risky transaction, since a new management team takes over operations of the company, and may turn out to be a complex and tricky process. Even if a potential target has been identified, securing funding to close the deal may require more than estimated time and effort.
Both MBI and MBO involve running the company by professional managers, who become owners after the deal is completed. Hence the challenges are two-fold, managing the investors and helping the business with its day-to-day operations. The deal advisor not only needs to help with selecting the right financial backers, they should also have sufficient management bandwidth to support running of the business initially, if required. It is important to note that the parties involved in MBO/MBI transactions – Investors, Management and Sellers pursue separate goals. We recognise this and try to manage expectations from an early stage and suggest realistic solutions.
- Assessing the viability of the potential targets for MBIs and prepare appraisal report on risk-return trade-off.
- Support the management in developing a detailed business plan.
- Conducting due-diligence and prepare a valuation report with sensitivity analyses. Reviewing offers received in detail for MBOs
- Advising on optimal capital structure for completing the transaction
- Helping in raising the appropriate debt and equity finance
- Support management in negotiations with deal terms with the involved parties, including banks, vendors and investors
- We maintain in-house database of financiers, making the process of finding investors for closing the deal easier
- Unbiased and independent advise since we do not fund the project
- Helping management and owner in negotiations
- Providing innovative solutions to complex problems that may arise during the transaction
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