Buy the business you manage

Buying a stake in the business you’ve helped to build should be an enormously exciting prospect – but it can also be a little daunting. With ownership comes amazing opportunities, but also the challenge of prioritising and finding the right funding for your future.

Why a management buy out might suit you and your business

There are good reasons for ambitious management teams to consider a management buy out (MBO) and they often come to us in a variety of situations. For example:

to allow the team to keep the management structure intact when the owner is selling
to grow the business with new funding from the MBO and advice from an experienced investor
to see the financial rewards from their work for the company
to help broach the subject of a management buy out in the first place.

Wanting to play a leading role in the next step of the business journey that you have helped to map out is completely understandable. From our point of view, if you’re already running the business, you will understand it better than anyone else – and have a better view of its potential and how to fulfil this.

You will have the advantage of having already built strong relationships with customers, suppliers and staff. And you will be able to benefit from the potential rewards and control that comes with being the owner of a business rather than an employee.

What is a management buy out?

A management buy out (MBO) is a transaction where a company’s management team purchases the assets and operations of the business from an existing owner who is looking to exit. It differs from a management buy in (MBI) where an external management team acquires the business and takes over the running of it.

How to buy your own business

The key to buying your own business as a management team is finding the right partners to work with. Take your time to identify the corporate finance advisers and private equity investors that will help you make the most of the opportunity. It’s not only funding you’re looking for but also a strategy for completing the deal and hitting the ground running on day one.

The nature of the approach you make to the business’s current owners will depend on the circumstances. In some cases, the owners may have made it clear that they want to sell and keep the management structure intact. In others, sale plans may be less advanced, and the management team may be looking to broach the subject of an MBO in the first place. Your advisors and potential private equity investors should be able to support you here on how to best structure a potential deal and broach that conversation.

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How private equity can support your MBO

The right private equity investor won’t just fund and facilitate an MBO, they should act as a catalyst for your business’s future growth. Our experience from 25 years of sustained success gives us a unique perspective that empowers our investees to make the most of the opportunities in front of them.

That experience will embolden you to make braver decisions and to progress the plans that you have for transforming your business. This might involve entering new markets, making acquisitions or hiring new key people. An MBO is more than just a deal; it’s how you design and deliver your future plans.

To build the best business in your market, you need to have access to the best skillsets. This is why we’ve designed an in-house team of experts to work with our management teams to enable them to deliver long term sustainable growth.

This growth acceleration team can equip businesses with the best value creation tools. Read more about how we help our investees:

Data & insight

Tech enablement

Talent

Customer acquisition & retention

Internationalisation

Mergers & acquisitions

We are relentless in how we think about new opportunities and what you need to succeed. This approach means that we empower our entrepreneurs to win throughout our investment and beyond.

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