Management Buy-Outs

The prospect of acquiring a business can elicit a mix of excitement and apprehension. A Management Buy-Out (MBO) typically allows the vendor to extract a substantial proportion of value at completion whilst often maintaining a minority stake in the “newco” structure.

Simultaneously, it presents a fabulous opportunity for managers to command the company’s future trajectory, with the prospect of personally generating substantial financial prosperity.

A MBO transaction is complex and has several moving parts, each capable of manifesting challenges that can jeopardise a fruitful outcome. It is imperative that vendors and management teams seek expert advice, at the right time, to optimise the likelihood of success.

Mulberry Advisors will help you navigate each step of the process with a wide-ranging skillset, including:

Establish a ‘Win-Win’: It is critical to ensure that this step is strategically planned with due care and consideration. When executed correctly, this creates a successful outcome for both the vendor and management team;
Pricing Assessment: It's essential to grasp the realistic valuation of the business and effectively communicate this. Striking a balance to enable a fair deal is crucial;
Secure Debt Financing: We utilise our established debt provider relationships to refinance existing debt facilities or raise new debt funding lines. We are experts at guiding clients through funder credit approval processes and negotiating competitive terms;
Equity investment: We work with relevant private equity provider relationships to secure the appropriate equity investment, ensuring strategic alignment between the management team and private equity investor;
Transaction Structure: Design a deal structure that robustly optimises equity returns without exposing the business to excessive risk;
Expert Negotiations: Leading negotiations with multiple parties requires a nuanced approach. We utilise our knowledge and experience to advise on transaction negotiations and crucially act as a calming buffer between the parties when emotions can become elevated; and
Maintain Deal Momentum: Our role incorporates keeping the transaction on track and successfully guiding it to a timely completion.

MBI

For Management Buy-In (MBI) candidates seeking to buy into a business, our assistance includes:

Target Identification: Pinpointing suitable acquisition targets that align with your objectives;
Approach and Engagement: Strategically reaching out to these identified targets;
Preliminary Valuation: Conducting initial valuation work to gauge the potential acquisition;
Structure a headline deal: Negotiating the fundamental elements of the deal;
Securing Funding: Assisting in securing the necessary funds; and
Execution and Closure: Guiding the process to successful completion.

Management buy-out (MBO) and management buy-ins (MBIs) transactions are intricate, yet exciting! It is critical that the appropriate independent expertise is on hand to ensure that they are completed smoothly, without any negative effect on the business and existing relationships.

Management Buy-Outs

MBI

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