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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