An MBO/MBI process can be technically complicated and time-consuming. It is essential that management teams and shareholders have advisors who both have the expertise to deliver the best possible terms and also have a hands-on approach throughout the process to minimise management disruption.
The shareholders may choose to closely control the process themselves (“Vendor Initiated MBO”) whereby they control information flow and negotiations with funders. Typically management will then only be introduced into the process once the vendors have negotiated optimal terms for themselves. Alternatively, management may initiate the process with a view to presenting the shareholders with a funded offer for the business.
Our corporate finance team advises a significant number of management teams each year and whether a Vendor Initiated MBO or management initiated, our role is to secure the best acquisition and equity deal for them as well as ensuring that they remain focused on maintaining the performance of the business at this crucial time.
We advise management teams throughout the entire MBO and MBI process including:
- Assessing valuation and the viability of a transaction;
- Identifying sources of funding;
- Formulating offer strategy with the vendors and manage negotiations of Heads of Agreement;
- Assist in deal preparation including detailed forecasts, Information Memorandum, Management Presentation and electronic dataroom;
- Negotiating funding terms included a detailed management term sheet with private equity investors;
- Consider tax aspects of the transaction;
- Locked Box and Completion Account preparation and negotiations;
- Review of legal documentation and close liaison with your chosen lawyers providing commercial, financial and tax input;
- Project management to completion; and
- Earn-out accounts negotiations.
We have strong relationships with the leading private equity houses and debt providers and, as a result, have a deep understanding of not only their requirements to achieve a successful completion but also how to secure the best terms in the current market.