A Management Buy Out (MBO) is often an exciting process, in a complex corporate environment. Ehrhardt Leus & Associates has extensive experience in MBO’s and has been involved in a large number of high-profile and very successful buy-outs, like Global Collect (out of TNT), CARe Schadeservice (out of Athlon Lease) and LoyaltyProfs (out of TNT).
Three key elements in coming to a successful MBO, are:
- The Board of Directors has to be positive about the business unit management team
- Business unit management team, which aspires an MBO, will have to make a compelling offer (often together with a private equity firm), to obtain the business unit
- Business unit management team consists of entrepreneurs
In most cases we are assigned by the business unit management team and work very closely as a team. Together we prepare a proposition, which is interesting to the Board of Directors of the parent company, and compelling to a financial sponsor (often a private equity firm), who will have to finance the potential transaction.
Ehrhardt Leus & Associates will provide support during the entire process of the MBO, from the first discussions with the management team about the process and the business case, to preparing a bid to the parent company and finding the right financial sponsor. We prefer to start as early as possible, to be able to share our experience in MBO’s and advise management teams on how to proceed to maximize the chance of success. Before approaching potential financial sponsors, a lot of work has to be done; from a strategic view on the business unit after the MBO, to preparing an Information Memorandum and handling the internal process. When there is a solid business case, and an eager and professional management team, we are convinced that an MBO has potential to succeed.
In general, an MBO process is exciting, and the result can be extremely rewarding for all stakeholders, including parent company, management team, financial sponsor and employees.
