Is now the right time for an MBO?

20 July 2020


Funding and Asset Finance

The last few months have been a time of unprecedented challenges and change for owner-managers across the country. As state aid is drawing to a close and businesses are beginning to reopen their doors, many owner-managers might be considering whether now is the right time for a management buyout.

What is a Management Buyout?

Simply put, a management buyout is when an organisation’s existing management team buys the owner out of their business. This can be the exit opportunity that owner-managers are looking for, whilst also providing an exciting prospects for the management team who are looking to acquire the business, to set a new direction for the company.

Why now?

The post-COVID19 landscape we’re now looking towards, has set the perfect scene for an MBO. The far-reaching disruption that the pandemic has caused, has led to many shareholders who were already considering retiring, or leaving a business, taking the steps to do so. In turn, many privately owned businesses and corporates are looking to sell to the incumbent management teams. All of this, coupled with the fact that there are less trade acquirers in the market right now, means that we’re going to see a sharp rise in MBO activity in the months ahead.

What are the benefits of an MBO?

The advantages of an MBO are vast. When selling your business to your management team, one of the main benefits is that you already know the team you’re selling to. If your business is an SME, the process of attracting a trade sale buyer can be a really lengthily ordeal, so selling to a team who already knows the intricacies of your business can make the negotiation process much more swift and efficient, with a lot more control.

How can we help?

Making sure you get the right advice when it comes to a management buyout is key. Navigating your way through the process can become really complex, and having the right advisor by your side can help to maximise the value of your MBO deal to its true potential. Our Corporate Finance team deliver a bespoke approach when it comes to management buyouts, which is tailored to suit each individual business. This ensures that our clients get the most out of their MBO. If you’re contemplating whether an MBO might be right for you and your business, get in touch to see how we can support you.


Chris Hird

Corporate Finance Partner