Would you join those lords a leaping, if an offer was forthcoming to jump out of your business?
A management buyout, commonly referred to as an MBO, can have a number of advantages for both the company’s owner and the folks in charge.
The first step is to establish with your management if there is an interest in or an appetite for an MBO.
The potential buyers will be required to invest personally in return for an equity stake in the business. Clearly most people can’t access the necessary funds independently, but the majority will be able to secure the backing of banks, private equity firms or venture capital houses.
As the departing owner, I’m sure you’d rather have the money in full at the outset. However, it may be worth considering a deferred payment plan, whereby a proportion is offered so the MBO can proceed, then additional sums are received, based on future trading performance.
All parties will wish to ensure the deal is right, so it is essential that external financial and legal due diligence is carried out as part of the process.
Good professional advice can be the key to a successful MBO and corporate specialists like Rob Moore can assist you at every step of the transaction. To discuss your options, contact us on (0114) 218 4000 or follow the firm on Twitter, @tayloremmet.