Management Buyouts in Today's Environment
Written by Jay Turo on Tuesday, July 10, 2007
Frothy private equity markets and the desperate need of financial and strategic financiers/acquirers to identify and incentive-ize quality management partners have combined to create a heightened interest in management buyouts (MBOs). An MBO is a form of leveraged buyout (LBO) used to transfer all or part of the ownership of a company to the individuals with the primary operational responsibilities for the enterprise. Both debt and equity investors are particularly interested in financing MBO because of the three "I's":
Management Buyout Financing in Today's Environment Management buyouts are financed through a combination of senior debt, subordinated debt, and equity. The key to bringing an MBO to fruition is to structure a transaction that addresses the concerns and objectives of each investor group.
Value of an Intermediary in the MBO Process In the management buyout process, a competent intermediary can:
If you are connected with a company that may be a candidate for a management buyout, or one that requires capital and/or is interested in selling all or part of their business, we encourage you to contact us at 800-506-5728 or at [email protected] for a completely confidential review.
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