Management Buyout (MBO) Advisory Service

management BuyOut

Have you been offered you the opportunity to become a business owner through a management buyout (MBO)? Our MBO advisory service and M&A experts support business management teams to secure the funding and manage the buyout process to ensure the transition to new ownership happens.

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Buying A Business

Management Buyout

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WHAT IS BUSINESS FINANCING?

Business financing is sought for the specific purpose of funding business activities which can include acquiring another business, management buy-ins (MBIs) or buyouts (MBOs), a key growth project or investing in new talent. Business financing can help you achieve your growth objectives and strengthen your overall competitive advantage. But the process to secure the business funding you need can be time consuming, stressful and costly if you don’t know what you’re doing.

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HOW MUCH BUSINESS FUNDING CAN YOU SECURE?

We work with ambitious, high-growing businesses that have funding needs in excess of £2m and regularly approaching £100m. Our clients’ needs will typically be for sophisticated finance products such as cash flow based lending or private equity investments. Our value lies in helping clients access funding that relies on confidence in future trading and cash flows.

See our deals and success stories.

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BUSINESS FINANCING – COMMON PITFALLS TO AVOID

We can confidently say that every client we engage is unprepared to take their funding proposal to their business bank or alternative lender. Being unprepared for funder scrutiny can significantly reduce, or entirely remove, your chances of getting the financing your business needs. Remember: first impressions count.

The typical things that can erode funder confidence and jeopardise your chances of securing a business loan include:

Failure to fully explain your business model;
Poor articulation of your value proposition and value drivers;
Inconsistent, incoherent or incomplete financial information;
Weak financial modelling and incomplete forecasts;
Presenting a biased view of business performance and risks;
Funding proposals that exclude critical information that lenders expect to see.

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BUSINESS FINANCING – HOW TO DO IT RIGHT

To successfully secure business funding, whether it’s for supporting an acquisition, a management buyout (MBO) or organic growth, you need to achieve four fundamental objectives:

Create a robust business plan that stands up to funder scrutiny;
Articulate that plan in a balanced and coherent way that funders can understand;
Approach the right partners to fund your plan as part of a competitive process;
Defend value in due diligence and close your transaction professionally.

Funders need to have confidence in you and your business from the beginning to the end of the financing process. In the world of funding first impressions matter and you must never approach the funding market until you are truly ready. We can help you get ‘market-ready’ to deliver funder confidence and secure the funding you need to make your ambitions happen.

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BUSINESS FINANCING ADVISORY SERVICES

By using our business funding advisory services, our experts will ensure that your funding proposal stands up to funder scrutiny and gives you the best chance of securing the funding you need. Below are the different types of business financing we can help you secure:

WHAT IS A MANAGEMENT BUYOUT (MBO)?

A management buyout (MBO) is a complex transaction where a company’s management team purchases the business they currently run. It can be a life-changing opportunity for the management team which has the potential for significant financial reward.

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However, making the transition from being an employee to a business owner comes with more responsibility and potential for loss. Additionally, a poorly managed MBO can have a long-term negative impact on the business, as well as the relationship the acquiring management team has with its current owner(s).

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WHO DO WE WORK WITH?

We work with management teams that have been offered, or want to bring about, the purchase of the business in which they’re employed. The management teams will typically oversee an Ebitda of £1m+ and have ambitious plans for the further growth of the business. For many of our clients, a management buyout is their first corporate transaction and we will show you the way through the process.

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See our deals and success stories.

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MANAGEMENT BUYOUTS - COMMON PITFALLS TO AVOID

Negotiating a management buyout is fraught with danger. Poorly handled MBO discussions can result in relationship breakdowns and damage to the underlying business. The typical errors that management teams make include:

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Undervaluing the business believing the current owner(s) can be held to ransom;
Hiding profit or delaying development of the business in order to lower the purchase price;
Taking an adversarial stance with the vendors;
Underestimating the personal financial commitment that a financier will want management to make;
Poorly defining their strategy for the business post-acquisition.

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MBOs – HOW TO DO IT RIGHT

A successful MBO is one where the management team and the current owners work collaboratively to deliver a solution. For a successful MBO a team must put in place:

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Agreed deal terms including a fair and reasonable valuation;
A robust and deliverable business plan that stands up to scrutiny;
A solid, deliverable and affordable financing package;
Trust between all parties to deliver the agreed transaction.

All parties need to develop confidence in the deal process which is maintained from beginning to end. With parties wearing many hats, the MBO requires delicate management. We can help you navigate the pitfalls and deliver a successful deal.

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MANAGEMENT BUYOUT ADVISORY SERVICE

By using our management buyout advisory service, our M&A experts can advise you through the complex MBO process giving you confidence in achieving the result you want. We increase the chances of your MBO being successful by delivering vendor and funder confidence that all complex moving parts of the deal are in hand. This is what our MBO advisory service provides:

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Negotiating the MBO deal

We help you agree a set of terms that are balanced and reasonable giving you the best chance of closing the deal. This may be in a competitive sale process or one-to-one negotiation with the vendors. We advise on valuation, structure and details such as liability caps and transfer arrangements. We ensure that all key issues are dealt with early and fully.