Management Buy Out
Our management buyout advisor helps companies develop business plans and raise capital to secure financing for management buyouts, leveraged buyouts, or partner buyouts. We helps companies access the capital to finance their management or leveraged buyout on primarily an all debt basis. This enables management to gain operating and financial control of the company either upon completion of the management buyout or over time as the management buyout financing is repaid.
Our Advisors alternative approach to secure management buyout financing is unusual because most leveraged buyouts or management buyouts are financed by a private equity firm . In those management buyout transactions, the private equity firm typically ends up owning majority of the company stock, even though most of the buyout financing is provided by third party debt providers. By financing the management buyout using debt, these private equity firms are able to invest little of their own capital and generate spectacular returns for their investors that dwarf the value realized by management or the selling owner had they accessed the capital themselves without using an investment banker or private equity firm.
Our management buyout consulting approach uses those same debt financing sources and techniques to fund the management buyout, but without the private equity or investment banking firm involved. As a result all the ownership of the company is shared between management and the selling owner. This can be attractive to a seller because the purchase price is often higher than a private equity firm will pay, while management gets the opportunity to own substantially more equity (often 80% or more). This type of management buyout transaction is financially and personally rewarding for the owners and managers because they have worked together for years to build the value in the company.