Management Buy In

MBI’s usually involve an individual, or team in senior management, coming out of one company with the aim of acquiring and running another business, often in the same sector.

Alternatively, the MBI may consist of an entrepreneur who has sold one business and now wishes to invest in another. As with MBO’s, MBI targets will usually include family-owned businesses where there is no natural succession or non-core trading divisions or subsidiaries of corporate groups, with the MBI team utilising a similar funding arrangement to that of an MBO. Sometimes an MBI team will join forces with an MBO team where there are complimentary skill sets and synergies across both teams. This form of transaction has come to be known as a BIMBO (or “Buy In Management Buy Out”).

When dealing with MBO’s/MBI’s, our advice to management teams usually comprises the following stages:

  • establishing the feasibility of the transaction by reviewing the relevant financial and commercial information
  • determining a suitable funding structure and assisting with the production of a funding document for submission to potential funders on behalf of the management team
  • proposing an appropriate deal structure and assisting the management team negotiate headline terms with the vendor(s)
  • leading discussions with potential funders, reviewing proposed finance terms and assisting in the choice of preferred funder
  • and project managing the transaction through to completion

Sunaxis also have extensive experience of advising vendors on the sale of their businesses or companies to both current and incoming management teams alike.