Under what circumstances can a MBO/MBI be pursued?
A Management-Buy-Out (MBO) respectively a Management-Buy-In (MBI) is an effective instrument to enable a succession planning transaction or a carve-out of a self-sufficient business unit.
Which conditions must be met prior to starting an MBO process?
For any MBO process, it is crucial that your company has a strong and experienced management team in place, which already possess a track record in their current function.
Which are the crucial challenges in an MBO/MBI transaction?
In most cases, management has not sufficient equity to fund a MBO/MBI transaction independently. Therefore, it is a key challenge to find the right equity- and debt-financing partner.
Due to the fact that the current shareholder, the management and the financing partner have different objectives, there is a potential conflict of interest, which needs to be handled carefully.
Hitz & Partner is aware of the major challenges, which a MBO/MBI transaction includes:
- Provide an independent view on valuation and run sensitivity analysis
- Add credibility to funding proposals
- Prepare you for meetings with debt/equity providers
- Negotiate with vendors and finance providers on your behalf
- Assess the reasonableness of all commercial terms
- Project management of the entire process