Management Buy-Out (MBO) / Management Buy-In (MBI)

Sale of a company to a third party may prove to be difficult for the following reasons:

  • A suitable buyer cannot be located
  • Approaching potential buyers risks market position
  • The seller is averse to providing confidential business information to third parties
  • Management opposes a sale to a third party

In any of these cases, the solution may be a sale to trusted employees or experienced management team – a Management-Buy-Out (“MBO”). If an external management team is found to take over the business, this is referred to as a Management-Buy-In (“MBI”).

The seller and the MBO or MBI regularly are faced with the following questions:

  • What is the “fair” company value?
  • How may the purchase price be financed?
  • Should the transaction be structured as share deal or an asset deal?
  • How can the transfer be best structured for tax purposes for the seller and the buyer?
  • How can banks providing financing and, if applicable, works council be convinced of the feasibility of the MBO model?
  • Should the seller continue to be involved operationally or continue to hold an ownership interest?

Our services

  • Professional support and execution of the MBO transaction
  • All services are provided from a single source
    • Business analysis and company valuation
    • Creation of purchase price financing models (earn-out model, vendor loan, purchase price deferrals, lifetime annuities, usufruct agreements, etc.)
    • Professional negotiations between owner, MBO team, works council and banks
    • Favourable tax structuring of the transfer model

Benefits to you

  • Experience garnered from numerous MBOs
  • High probability of successfully executing the MBO