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