Maasdael Corporate Finance – Management buy-in/out

Management buy-in/out

If you have entrepreneurial ambitions and there are signs that the company you work for might be sold, it can potentially be the perfect circumstance for a management buy-out (“MBO”). An MBO is quite complex, but with the right preparation and appropriate guidance it can be a particularly interesting and relatively safe opportunity to become an entrepreneur. Maasdael Corporate Finance advisors have years of experience in banking and know how an MBO can be structured and financed. This experience of the advisors ensures that that they can recognise favourable situations and can come up with creative solutions when matters threaten to stagnate.

What can I expect as management if I acquire the shares of the company?
Successfully realising an MBO and becoming the owner of the company where you are employed is a dream for some and a realistic opportunity for others. Before taking any steps you must clarify your own considerations and those of the seller, as well as what the possible consequences will be if the acquisition does not go as anticipated. The next step is a feasibility check which includes a valuation of the company and the establishment of a possible transaction structure.

Approaching the current shareholders can be a delicate matter and should be handled differently for each individual situation due to the relationship and interdependence between shareholders and management. If the resulting discussions are positive and the selling shareholder is comfortable with the competences of the manager, an offer and the proposed transaction structure will be recorded in a Letter of Intent. During this stage we will translate your business plan into an Information Memorandum including cash flow models, which will be used to approach potential financiers and/or investors.

Having a strong network is decisive for obtaining appropriate financing, which in turn is a key success factor for realising an MBO. Our extensive experience provides us with the knowledge to identify exactly which information is required by the banks to come to a positive decision and what the best channels are to arrange the financing. This can also conclude in finding alternative investors as private equity firms and informal investors.

Depending on the situation the level of required due diligence is assessed and the transaction is negotiated further. Signing the purchase contract is the end of the process, but more importantly the start of a new period.

Why Maasdael?
Maasdael Corporate Finance helps managers and investors with investigating the feasibility, the structuring and realising of MBOs. There are times when an MBO is cancelled because of lack of conviction that the management would be able to financially realise the MBO, which is unfortunate because the opportunities are often greater than you think. Besides indicating what you can expect during an MBO process, we are able to give you an impression of the possibilities and the obstacles. We assist the purchasing management from start to finish and often even after the transaction has been completed.