In a management buyout, don’t let emotion cloud business sense
Just because the management team knows the business doesn’t mean they should go into an MBO with their eyes closed.
A management buyout (MBO) can be the best means of disposing of a business but there are funding pitfalls to avoid, for the seller and the management team.
“From a seller’s perspective it can be seen as an attractive method of disposal, as the knowledge base is retained and the business will be in ‘safe hands’ going forward,” says Colm Sheehan, corporate finance director at Crowe. “It can offer a very positive outcome on an emotional level, as well as being financially attractive for the seller. But, as with any deal, it is important not to let emotions override the commercial rationale for the deal compared with other alternatives.”
