Guiding your company through management and ownership changes can be a complex, time-consuming process which requires specialized expertise to ensure successful completion of the transaction. We can help you transition your business to the next level.
Management Buyouts (MBOs)
An MBO occurs when all or part of a company’s shares are bought by its senior executives.Legally and financially, MBOs are similar to an external acquisition. Legally and financially, MBOs are similar to other corporate acquisitions. Often, the management team needs additional external financing to complete the transaction. F&M works with our client to assess the amount of capital needed to complete the deal. We conduct a comprehensive valuation of the company and identify viable options for management to raise the required capital. We identify potential funding sources and can negotiate with funders on behalf of our client to secure the financing needed to complete the MBO.
By working together with retiring shareholder(s) and the new management, we can structure an appropriate deal that factors in the contributions made by management over the years, and provides the owner(s) true value for their shares. A successful MBO requires the sellers and buyers to work through a collaborative process. Through our process, the owner(s) and the new shareholders work as a team to complete the MBO. F&M skillfully facilitates the negotiations, considering the interests of both parties to arrive at a fair and successful agreement. Success through this collaborative process is critical – failed MBO can prove to be disastrous for organizations and their shareholders.
F&M Principals bring extensive experience in company valuation, MBO structuring and aligning the shareholders to achieve a common objective. We can assist companies through all phases of the MBO process, which may include the following steps:
- assessing ownership structure
- defining goals and objectives for the management transition
- assessing corporate performance
- company valuation
- assessing financing options
- planning future growth and exit strategies
- preparing a corporate profile
- sourcing and selecting partners and investors
- structuring the MBO process
- re-distributing ownership
- negotiating and securing financing
- due diligence and closing
- transition and change management process
- management training
- post-transaction follow-ups