Choose the Best Funding Option for MBI/MBO

An MBO (Management Buy Out) is a business acquisition made by the internal management team of a target company, while an MBI (Management Buy In) is the acquisition of a company by an external management team. MBO's and MBI's are inherently risky ventures, the success rate of which is very low unless conducted with professional help.

 

When are MBI and MBO undertaken?

The current management of a business undertakes an MBO if the organisation is divesting a business segment. It could also take place if the owner of a business is retiring and the management is convinced about the growth prospects of the business. An MBI is undertaken by a group of entrepreneurs or a strong outside management team. This team identifies underperforming businesses in its sector and buys the business that it thinks it can resurrect through its skills and expertise.

 

What do I need to mount an MBO or MBI?

A broad range of MBI and MBO opportunities are available for senior executives who have the ambition and risk taking ability to acquire and run their own business. However, you need to take each decision with care in order to ensure the success of your MBI or MBO. The first decision that you need to take while mounting an MBI is to identify a target business. The selection of the target business should be based on the sector/industry in which you or your management team specialises in, the size of the business and its location. The target should also be operating in a rapidly growing market. In case of an MBO, you need to determine the viability of the venture first.

For your MBO or MBI to be successful, you need to work out every detail and resolve all major and minor issues successfully. This is where you will need an experienced professional adviser. The adviser’s job is to help you draw detailed business plans that will ensure that you achieve your goals successfully. The adviser should also have useful financial contacts that can help you in funding your MBO or MBI.

You are unlikely to be able to mount an MBO without external funding. You can receive the required funding through venture capitalists or financial institutions. However, you need to decide on the right venture capitalist, so that you get a funding package that is enough to meet your cash requirements and has flexible repayment terms.

 

Do I need the help of consultants for an MBO or MBI?

Mounting an MBO or MBI is a complex task and needs to be dealt with professionally. Whether it is the selection of an appropriate MBI or MBO target, identifying a proper asset financing company, or writing out a funding application, Strategy Corporate Finance can assist you at every step. Our team of experienced and qualified consultants has extensive experience in undertaking corporate finance transactions and has an unparalleled network of contacts. We work proactively with buy-in candidates and teams to define their acquisition criteria and identify suitable target businesses.

If you would like to know more about our range of MBO/MBI finance services contact us today on 0845 838 0936 or drop us an email.

 

 

If you would like to know more about our range of corporate finance services, contact us today on 0845 838 0936 or drop us an email.