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	INVESTMENT PROCESS > MANAGEMENT BUY-OUT
THE PROCESS TESTIMONIALS EXPANSION CAPITAL MANAGEMENT BUY-OUT (MBO) MANAGEMENT BUY-IN (MBI)

		A management buyout (MBO) is the purchase of a business by its management. Financial partners, including debt and equity providers, usually team with management and provide the bulk of funds. The key feature is that management acquires an equity interest in their business and as such become owners and not just employees. However, undertaking an MBO can be difficult and confusing unless a clear process is established at an early stage. Equity Partners is a leading player in the mid market in Australia and New Zealand. Equity Partners can provide assistance to MBO teams, not only providing the finance for the purchase, but also providing critical assistance during the deal negotiation.
		ADVANTAGES OF AN MBO FOR THE SELLER: There are a number of reasons that an MBO bid can be more attractive to a seller than a trade sale:
			Speed – An MBO can be much quicker than a trade sale.
			Strategic reasons – the vendor may not wish competitors to be in control.
			Confidentiality – the vendor may not wish to let competitors have access to sensitive information that would be disclosed during a trade sale process.
			Familiarity - With an MBO the vendor can continue to deal with a management team with whom it has an established relationship.
			Pricing - Equity Partners can provide finance and deal structuring advice focussed on agreeing the best deal in terms of price optimisation.
		WHAT IS REQUIRED:
			A clear growth strategy going forward.
			A willing vendor with realistic price expectations.
			A strong selling proposition or a sustainable competitive advantage.
			A strong well balanced management team, preferably with an identified leader with an entrepreneurial outlook.
			A management team willing to invest in the business.
			A commercially viable business capable of supporting an appropriate funding structure.
			An exit plan.
		HOW TO DO IT:
			Contact us to discuss the opportunity. The earlier we become involved in the process, the more help we will be able to give in structuring the deal. If the opportunity is not for us, we will give you up-front feedback and suggest alternative strategies/sources of finance.
			Formulate your plan.
			Make your pitch to the vendor. (We can often assist in broaching the subject with the parent company.)
			Prepare a business plan.
			Agree terms with us on how the deal will be structured.
			Agree terms with the vendor/shareholders.
			Assist us in conducting due diligence.
			Obtain debt finance.
			Legal documentation.
			Make your vision a reality.
		WHY EQUITY PARTNERS? Managers are unlikely to be involved in more than one MBO in their working lives so it makes sense to get a party involved early in the process who can help obtain the best terms. Undertaking the process with Equity Partners offers the following advantages:
			The early involvement of Equity Partners can save valuable time and allow the management team to;
			Concentrate on the numerous other aspects of the deal.
			We can assist you with the initial valuation and structuring, feasibility assessments and forecast preparation.
			We have significant experience in negotiating MBOs and will be on your side of the table in the negotiation.
			We have been involved in growing companies across a range of industries and can help put that experience to use.
			We can help with the recruitment of a chairman and other core members of the board and/or management team.