AMS

Mergers

Many people dream of running their own business and the current high level of Venture Capital funds and bank funding available means the dream is a real possibility.

For some, the route to becoming a business owner will mean starting from scratch. However a faster approach will involve taking over an existing business, often by way of a Management Buy-Out (MBO) or a Management Buy-In (MBI) or a Management Buy-Out / Management Buy-In (Bimbo).

Management Buy-Out is the term applied when a business is sold to the existing management team. Often this occurs when large companies seek to dispose of parts of the business or when the existing owner-manager is looking to retire.

The existing management are often the people in the best position to take the business forward as they have expert knowledge of the company and its work-force. Strategically, they also present a more favourable option to the existing owner than selling to a competitor or closing the business down.

The main problems for the buy-out team will be securing the necessary finance. MBOs will require more capital than a start-up.

Management Buy-In is the term applied when an outside management team buys a stake in an existing business. Typically this happens where the business is under-performing due to weak management or lack of suitable expertise or where the business growth demands a more knowledgeable and experienced management team.

The MBI enables the business to inject the depth of experience it requires and the new manager’s share in the future profits they generate.

The amusingly named Bimbo is where the existing management team buys out with the assistance of further team members who are buying in.
There is no requirement for any of the team members to be blonde!

AMS specialists have advised many purchasers through the management buy-out process, helping to secure the necessary finance, negotiating with the vendors and project managing the deal to completion.

We also have a successful MBI programme in place where, working with potential purchasers to

  • assist in the development of a business strategy
  • deal with the vendors
  • secure financial support

We manage the transaction to a successful conclusion leaving the new management to concentrate on running the business.

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