Management buyout

Whether you want your management team to take ownership of your business to facilitate your exit and to drive it forwards, or if you’re looking to acquire a business from its owner, our Management Buyout (MBO) experts advise both the buyer and seller through the complicated MBO process.

What does this service provide?

If you wish to sell your business to your incumbent management team or if you are offered the opportunity to buy the business for which you work, here’s some of the support our specialists can offer:

  • We can meet with all potential participants in an MBO to discuss the process, assess the skills of the team management team, and advise on the achievability and financing of an MBO.
  • We can provide a professional valuation of the company to help parties through the often-thorny discussions on price.
  • Our debt advisory and equity advisory teams will offer pragmatic funding support depending on the specific requirements of the MBO.
  • We will help the buyer make sure the business being purchased can comfortably support the funding structure being entered into.
  • We will support the seller and buyer to complete the transaction in a timely and efficient manner.
  • Ultimately, we will need to advise either the seller or the buyer, however our extensive experience on both sides means that we can navigate the transaction sensitively and efficiently.

Important things to consider

  1. An MBO is an extremely delicate transaction. It places the management team and shareholders in the opposing camps of buyer and seller. If handled incorrectly, an unsuccessful transaction can have a long-term negative impact on the business.
  2. Its unwise for either a business owner or a management team to broach the subject of an MBO without fully understanding how to complete the transaction. Professional advice and support materially de-risks the process of an MBO.
  3. An MBO is a transaction in which a company is purchased by management using debt, external equity, vendor roll over, or a combination of each. It is one of the most complex transactions that can be considered.
  4. The management team rarely have the financial resources to buy the target company but will need to make a meaningful financial contribution. Meaningful is defined in the context of the individuals personal worth.
  5. An MBO needs a clear leader in the management team. While agreeing on who the CEO should be and making sure they are strong enough is not an easy task, it is something that must be done well before an MBO is realistic.
  6. Running an MBO alongside a trade sale for mid-market private companies is extremely challenging. It is best advised to be clear on the intended outcome before embarking on either course of action.

How much will the service cost?

Our fees are designed to ensure that we are totally aligned with your objectives. We have designed, over years of experience, a balance between commitment fees and success fees that makes sure that we are “in it together”. Our objective is for clients to always see value in our fees that significantly exceeds cost.

What should I do next?

If you would like Shaw & Co to help you with a Management Buy Out (MBO), please contact one of our corporate finance experts shown on this page, or click the arrange a meeting button.

“Management teams often make once in a lifetime returns from modest investments in such transactions. Conversely, your management might be the right future guardians of your legacy. Getting an MBO off the ground in the first place is a sensitive and complex task. Not only does the sale and purchase have to be negotiated between connected parties, but funding needs to be put in place and the deal for the management team negotiated both between themselves and with investors. We have the experience to guide you through all the stages of this intricate process to ensure that your deal is completed.”

Jim Shaw, Founder & Partner

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Access to the whole market

Funding your transaction takes more than a phone call to the bank. Through our extensive network of PE houses and debt providers, we'll bring together the right solution for your transaction.

Keeping you on track

A management buy-out is complex, time consuming and can easily go wrong. Our experienced team will keep you on track and undertake much of the heavy lifting to ensure results are delivered.

Realising value

An MBO can be the best way to exit your business. It can also be the first step to creating value for its participants. We help you with the deal and then support you as you grow and exit your investment subsequently.

This is for you if...

You would like to sell your business to your management team. You have been offered the opportunity to buy the business, or you would like to bring about that opportunity. You are looking for assistance to fund your MBO transaction or someone to lead negotiations for you.

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