Management buyouts: back to basics

One of the most common methods a business can deploy when looking to sell its business is through a management buyout otherwise known as an MBO from a team within the company.

In its simplest form an MBO involves a company’s management team combining resources and raising finance to acquire all or part of the company they manage. Often this team takes full control and ownership using their expertise to grow the company and drive it forward.

The management buyout team will typically consist of three people and is built on a foundation of trust between each other and by the sellers and funders with the current business owners also required to be reasonable on value expectations.

There are several traits of a business that would facilitate a successful MBO:

• A company with a good track record of profitability.
• Good prospects for the company...