Management Buy Out Funding

Most MBO teams do not pursue a MBO because they perceive they can’t access sufficient finance to meet the asking price of the business.

There are many ways to put the funding together for a MBO - Management Buy Out, let’s look at the most common sources of finance:

  • Equity
    Management Equity, Business Angels, Venture Capital and Mezzanine Finance
  • Debt
    Cash Flow Loan, Crowd Funding, Invoice Discounting, Asset Finance or Commercial Mortgage
  • Vendor Assisted
    Deferred Consideration or Earn Out

There is no “normal” blend of the above funding sources to comprise a deal, but by and large they will comprise equity, debt and vendor assisted funding in one form or another.  The precise quantities of each will be totally dependent upon the unique circumstances attributable to each deal.

During a Management Buy Out our role is pivotal, we work alongside you to in all aspects of the MBO process from start to finish, which will incorporate the following:

1. Initial negotiation of the consideration with the vendor (or their advisers).
It is important that we are engaged at this early stage on your behalf, as it establishes your serious intent and should negotiations fall down for any reason, you are distanced from these.  After all you still have to work there if the deal falls through.

2. Assisting you in the preparation of a comprehensive business plan,  incorporating financial projections to substantiate to potential lenders that this is a credible MBO, and can meet its funding obligations.

3. We then source the finance, often from more than one lender, in order to get the most suitable blend of finance for your MBO.  Every deal is different, therefore every blend is different.  Our funding packages are “tailor made” for your deal, we don’t simply rely on the high street funders.

4. We liaise with your solicitors, the vendor, their solicitors, your funders, their due diligence teams, etc.

We project manage the whole transaction to a successful conclusion, leaving you to concentrate on running the business.

Assisting other advisors

If you already have advisors working for you, we can be engaged to work with them to solely source offers fron non bank lenders

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