Buy outs

Buy Outs can be highly complex transactions and come in a variety of forms, the most common of which are a Management Buy Out (MBO), Management Buy In (MBI), and Investor Buy Out (IBO).

For the management team, Buy Outs present a number of challenges which need to be addressed at the outset. In particular, there are risks that by exploring buy out opportunities, managers may breach the terms of their service contracts and/or general duties to the company. Buy Out discussions typically require managers to disclose confidential business information to prospective funders and inevitably result in managers spending much of their time working on the Buy Out rather than devoting their time to the business of their employer.

Our team is recommended for its Buy Out work (add MBO quote – see quote section). We have a considerable track record of advising sellers (including MBO/MBI teams looking to exit), management teams, investors and financial institutions on all types of Buy Out transactions including MBO's, MBI's and IBO's, secondary Buy Outs and ‘buy and build’ acquisitions.

We are experienced at working with corporate finance accountants and financial institutions to identify the most appropriate structure for MBO/MBI transactions - structures which maximise the opportunity for the management to succeed while at the same time providing a clear exit strategy for investors/institutions.

Work experience/case studies:

• Having advised the management team on their 2003 MBO of a well-known software publisher, we recently advised the team on the disposal of their shares in the company and on their investment in the acquisition vehicle. The structure of the secondary deal was driven by a complex tax saving scheme which required us to work closely with client's tax and corporate finance accountants (and those of the private equity buyer) as well our Association colleagues in Luxembourg.
• We acted for a management team who secured an MBO of a South West group in the printing & packaging sector, which also involved complex share restructuring and buy back issues and detailed negotiations with the institutional investors who had an investment of approximately £25 million.
• We advised the management team on their £3.3million MBO of a South West company specialising in the re-fitting of commercial premises.