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0113 246 1234

Management buyouts – An alternative strategy to exit and succession

When planning your business exit and succession strategy, it’s crucial to consider all possible approaches, even those that might not immediately come to mind.

A management buyout (MBO) is an option currently gaining popularity for its flexibility.

It enables you to transition out of your business while leaving it in the hands of a skilled and trusted team. With professional guidance, pursuing an MBO could be a wise strategic move that sets your business up for continued success and growth.


Should your business pursue an MBO?

An MBO involves your current management team, whether it’s led by a single director or the entire team, purchasing the business from you and taking over its operations.

This process includes negotiating the terms of the purchase and valuing the business, where you and your team decide how much of the business they will acquire and under what conditions you will exit.

This type of buyout ensures a seamless transition with minimal disruption to business operations while also enabling the new owners to implement their vision for the business.

MBOs are often well-suited for companies that:

Funding for an MBO typically combines personal equity from the managers involved with external financing sources.

Using MBOs as a strategy for exiting your business

MBOs ensure a seamless transition in leadership, preserving the current corporate culture and operational continuity. This gives owners confidence that their business will be well-managed and equipped for future growth.

Moreover, MBOs align the interests of existing employees with those of the new owners, minimising conflicts and promoting higher staff retention rates.

As you plan your retirement or departure, consider discussing an MBO with your management team to address any concerns your staff may have. Ultimately, MBOs provide a compelling exit strategy for founders and owners who want to ensure their businesses are left in capable hands.

For personalised advice on MBOs and developing an effective exit strategy, please don’t hesitate to contact our team today.


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