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Business Sale Deal Structures

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The different deal structures, what they are called and how they work.

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0333 3440 778 - cf@opusllp.com

There are a number of deal structures available to an owner-manager wishing to sell.

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MBO/Management Buy-Out


The acquisition of the business by the existing management.

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The management team is often the best buyer as they know the business and are usually the best people to take the business strategy forward. If the business is under performing due to poor management an MBI( a buy in by an external candidate)  or trade sale may be preferable.

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MBI/Management Buy-In

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The acquisition of whole or part of the business by an outside management candidate or team

An outside management team is either found or communicates their interest in acquiring the business. If you are interested in selling and an MBO is not preferable a buyer must be found. The services of a business broker to identify and discreetly approach potential buyers can greatly increase your chances of a successful sale.

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Earn-out 

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A deal is structured with an initial payment and with a further payment only upon the completion of set performance indicators. The business owner normally continues to work with the buyer through a prescribed transition period.

VIMBO/Vendor initiated Management Buy-Out


A management buy-out initiated by the vendors.

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BIMBO

 

Management buy-in management buy-out
Combination of outside managers and current employees buying the business. Earn-out.

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Cash-out


The Shareholders agree to cash out a shareholder (or shareholders), often by borrowing against the value of the business.

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Trade sale/Sale to another company or individuals


The business is sold to another company such as a rival in it’s sector.

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AIM -flotation of a company on the Alternative Investment Market


The business owner floats all or a portion of their shares on the Alternative Investment Market.

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