Case Study: SALIENT FEATURES OF A MANAGEMENT BUYOUT (MBO) Background note

Title
SALIENT FEATURES OF A MANAGEMENT BUYOUT (MBO) Background note 

Author
Ward, M 

Pages
4 pp 

Product Type
 

Reference #
104-068-5 

Teaching Note
 

Institute

Setting
 

Year
 

Keywords
South Africa



Summary/
Abstract
A management buyout (MBO) involves the purchase of an existing business by its senior management team. It has proved itself to be an attractive vehicle for management, who can accumulate wealth in the form of an equity participation in their company. This note looks at salient features of MBOs, such as how they are structured and financed, and how equity is allocated. It also examines how to evaluate an MBO candidate to gauge whether it has potential for success.

 


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