A management buy-out (MBO) is a transaction where the owner of a Company sells some or all of the shares to members of the management team. Often the management team will set up a new company as the acquisition vehicle (Newco). Frequently the funding for an MBO may be provided by a mixture of funds from the management team, private equity and bank lending.
It is fairly common now for the seller to sometimes retain an interest in the Company in the form of debt which is repaid over time. This is often referred to as vendor financing and, in some transactions, all of the MBO is vendor financed. In these circumstances a seller will typically require additional security.. Each MBO is different. Therefore, with our clear approach and practical support and advice, we can help with the MBO, ensuring that the deal is completed as quickly and efficiently as possible.
Our corporate and commercial team offers you expert advice based on proven experience and extensive knowledge of MBO’s in many industry sectors, combined with the help of our other commercial teams from commercial property, intellectual property and employment.
We can assist with all aspects of the legal process and guide you through the sale or purchase, whether you are part of the MBO management team or the seller, where our services often will include dealing with:
- Structuring and co-ordinating the transaction the deal
- Heads of Agreement
- Non Disclosure Agreements
- Share Purchase Agreement
- Formation of Newco
- Articles of Association
- Subscription/investor agreement or Shareholders Agreement
- Security documents, inter-creditor deeds and cross guarantees
- Loan Notes
- Board Minutes and Shareholder Resolutions
- Directors Service Agreements