Oxburgh Row Financial Blog

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Is an MBO or LBO right for you and your business? A management buyout (MBO) is a complex transaction in which a company’s managers acquire a large part or all of a company from either a parent company or from a private owner or owners. Another form of a management buyout is a leveraged buyout, in which a management team acquires an ownership in a business primarily through debt financing.

MBOs often occur when an owner wants to exit a company but prefers an acquisition strategy that does not involve the business being marketed to outside parties. An MBO also allows a business owner to place the business with a trusted management team and allows for minimal disruption with existing business relationships.

An MBO also can make sense in instances in which a company is in financial distress and needs cash or the management team believes a major strategic change in their company’s direction could help it grow and prosper. In any of these instances, the owner and the management team will need a fair market value of the company.

That’s where we come in. We provide credible guidance for complex matters such as management buyouts. Valuation is only part of the picture. We also provide a host of strategic consulting services that are designed to help companies reach their full potential.