Mergers & Acquisitions

Buy-out and -Buy-in

 

ConAlliance has deep experience in completing management buyout/buyin as for example in assisting management gaining ownership control of their business. ConAlliance serves as a buyout or buyin advisor and corporate financial consulting firm to profitable, private companies.

A management buyout (MBO) is a method of acquisition where a company's existing executives acquire a large part or the whole company. Management buyouts are similar in all major legal aspects to any other acquisition of a company. A management buyout can also be attractive for the seller as he can be assured that the future stand-alone company will have a dedicated management team thus providing a substantial downside risk against failure and hence negative press. Additionally, in the case the management buyout is supported by a private equity fund, the private equity will, given that there is a dedicated management team in place, likely pay an attractive price for the asset.

Whereas a management buy-in (MBI) happens when an executive or a management team from outside the company buys it, and becomes the new administration. A management buy-in team often competes with other purchasers in the search for a suitable business. Usually, the team will be led by a manager with significant experience at managing director level.

A leveraged buyout (LBO) is when a company or single asset (for example real estate property) is purchased with a combination of equity and significant amounts of borrowed money, structured in such a way that the target's cash flows or assets are used as the collateral (or "leverage") to secure and repay the money borrowed to purchase the target-company/asset. Since the debt has a lower cost of capital than the equity, the returns on the equity increase as the amount of borrowed money does until the perfect capital structure is reached. As a result, the debt effectively serves as a lever to increase returns-on-investment.

As a buyout/buyin consultant, ConAlliance assists companies develop business plans and raise capital to secure financing for management buyouts, leveraged buyouts, or partner buyouts. We help management through each stage of the transaction, ensuring that the right price is paid for the right business with the right financial structure. And of course ConAlliance advises financial investors on leveraged buyouts.

We offer the following Buy-out and -Buy-in (MBO/ MBI/ LBI) services:

• comprehensive transaction consulting
  
• structuring of the acquisition
• coordination of external consultants (lawyers, auditors, tax advisors)
  
• search for additional investors
  
• negotiations
  
• post-acquisition structuring
  
• etc.

 

Our senior-level deal leads are actively involved in every transaction, representing the client’s interests from initiation of negotiations through successful closing. Please do not hesitate to contact us.