CORPORATE LAW

MANAGEMENT BUY OUTS

A Management Buy Out (MBO) is one of the most popular succession routes for business owners as it allows them to hand over the reins of the business to its existing management team. A MBO enables a company’s management team to purchase the business – often with the help of external third parties such as a bank or private equity fund. The management buyout process whilst flexible is also complex and takes time and expertise to complete successfully. At Birch Law we can assist both sides to a MBO to ensure the transaction proceeds as seamless as possible.

If you would like to discuss any of our services with us, feel free to contact us using the form below or give us a call at 0161 669 4621 for a free no obligation chat. We look forward to assisting you with your legal concerns.

BIRCH LAW. For businesses and individuals. PROBLEM SOLVERS, EXCEPTIONAL ADVICE, CLIENT FOCUSED, UNRIVALLED VALUE FOR MONEY.

HOW CAN BIRCH LAW HELP?

If you would like any further information or need advice about any dispute, please get in touch with us today. You can contact us today on 0161 669 4621 or by email on sbirchall@birchlaw.co.uk for a free no obligation chat.

How a MBO works?

A new company will need to be set up by the management team (NewCo) to purchase the shares or assets of the existing company (OldCo). NewCo will own the shares in OldCo but the underlying business remains the same with the management team remaining employed by the OldCo.

What are the advantages of an MBO?

The main advantages of a MBO are that:

  • There is no need for the business owner to find an external buyer.
  • They ensure business continuity with the management team remaining the same.
  • The risks are generally lower for both buyers and sellers.
  • The costs and time to complete the transaction tends to be a lost less because of reduced due diligence and time arguing over warranties.

What are the disadvantages of a MBO?

The main disadvantages of a MBO are that:

  • There is often need for external funding, such as bank lending or private equity, this can in certain circumstances add a further layer of complexity as the third party funder may require enhanced due diligence on the business before proceeding.
  • MBOs usually attract a lower purchase price.
  • Payment (whether in full or in part) is often linked to the continued success of the business and/or payment will on a deferred consideration basis.

How Birch Law can help?

At Birch Law we can assist both the seller and the management team in an MBO. We will work closely with you to ensure that your interests are protected and the transaction proceeds as smooth as possible. For a free no obligation chat please contact us on 0161 669 4621 or by email at sbirchall@birchlaw.co.uk.

Whichever funding route you choose, you can rest assure that our experienced solicitors will always do their utmost to keep costs as low as possible. If you would like to discuss any of our services with us, feel free to contact us using the form below or give us a call at 0161 669 4621 for a free no obligation chat.

HOW WE CAN HELP YOU

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BOOK A TIME TO DISCUSS YOUR MATTER

Please complete our online enquiry form or contact us at sbirchall@birchlaw.co.uk for your free 30 minute consultation. You will be able to choose a time and date that works for you.

2

MEET WITH ONE OF OUR ADVISORS

Meet with one of our advisors on MS Teams, Zoom, by telephone or in person. They will find out about your legal needs and discuss how best we can help you. We will set out your options and provide transparent costs information so you can make an informed decision as to how you want to proceed.

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IMPLEMENT

Once we have agreed on the correct course of action for you, we will then implement and execute your instructions.

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