A management buyout (MBO) is when a management team collaborates to buy either a total or a majority stake in the business they manage; buying out the current owner and taking control. When deciding how to sell your business or begin your succession planning, an MBO can be a viable option for businesses of any size or in any industry.
Distinct from a leveraged buyout or management buy-in, typically a management buyout works by creating a holding company through which the management team can acquire a controlling stake of the trading business.
Interested in planning your succession with an MBO?
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Planning your business succession strategy?
For an owner looking to sell their business, management buyouts have several advantages.
The buyers are already present and know the business well, reducing the length of the transaction and ensuring confidential details stay within the business.
The exiting owner can also see their legacy protected through the acquisitive management team, with a lower risk of corporate changes or restructures.
Wanting to take ownership?
An MBO can be a prime opportunity for an ambitious, entrepreneurial management team, providing greater control of a successful venture.
Stepping into a different management dynamic, the new owners will utilise their already extensive knowledge of the business to unlock the business' growth potential and develop future business security.
Case Study
Led by Richard Jones, MD, the management team at Paramount Interiors completed a buyout in 2018 supported by the GS Verde Group.
GS Verde supported at every stage of the process, from the business valuation to financial modelling, legal structuring, tax structure, and shareholder agreements.
"I am very excited about what the future will hold for Paramount, myself and the management team as a result of the MBO. We have an exceptional team [...] and the MBO allows us to invest further in our people, our facilities and the service that we provide to our clients to ensure that we continue to be one of the best in our field." - Richard Jones, MD, Paramount Interiors.
There are a number of benefits to undertaking an MBO, including:
The new ownership team needs to fulfil key directorial positions and have the necessary business ownership skills to be successful.
Management buyouts often require substantial financing, and the process of securing funding impacts how long the transaction will take.
Expert legal and financial support is crucial to make sure you can do an MBO, ensuring the deal is structured in the most efficient and beneficial way.
All the support you need, under one roof
We guide businesses through the entire MBO process, advising on the specialist corporate finance and legal steps.
Financial analysis and forecasting, valuation, funding arrangements and legal structuring will all be required. With finance, communications, tax and legal advisers acting as one team, you have all the advice needed to get the deal done.
To find out if an MBO is the right option for you and your business, contact us.
Discover how the GS Verde Group can support you
Contact us to discuss your options
A leading building services provider has announced full transfer of ownership to company founder's son with support from GS Verde Group.
An established, innovative civil engineering firm has completed a management buyout transaction in a deal advised on by GS Verde Group.
Dock Solutions, the largest UK manufacturer of loading bay equipment, has completed a Management Buyout in a deal advised on by the GS Verde Group.
