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Employee & Management Buyouts

Business owners often want to see their business and its legacy carry on after they exit.  Knowing that they’ve sold the business to partners who understand the business and its needs can give great comfort to owners that have dedicated a large part of their lives to growing that business.

Who knows the business better than its management and key employees? Their intimate knowledge of business operations, relationships with suppliers and customers, and shared passion for the business are some of the many reasons that owners are turning to their employees to take over the company. (Read our Article on Employee Buyouts.)

Management buyouts (MBOs) are a way for senior employees to acquire ownership of the business where they work.  Owners and employees have the opportunity to be creative with the structure and funding of the transition, enabling a customized solution that meets the objectives of both parties.

However, negotiating a MBO structure is  complex and can easily become emotional. Business owners may fear that employees aren’t able to “think like entrepreneurs”, or that the employees won’t be able to afford to buy the business.  Additionally, legal, financial, tax, and HR requirements all need to be considered, and the objectives of both the buyers and sellers need to be clearly understood and acknowledged.

Our team has worked on numerous MBO transactions, and understands the challenges and opportunities available to businesses considering this method of transition. We work with both the owners and employees to propose, negotiate and implement beneficial structures that focus on the business’ future long-term success. We then work closely with the new ownership team to ensure that skillset gaps are identified and addressed, and that management are trained and prepared to operate the business strategically as entrepreneurs.

Additionally, our connections to local financial institutions and financiers allow us to introduce our clients to the flexible financing options available when considering external financial support.

 

Let our team of experienced professionals assist you in creating and implementing a customized MBO structure. Contact us for a free initial consultation6