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Corporate finance:
Management buyout

If you have got the drive to run your own company, and the present owners are willing to sell, then we can help you make it happen.

The starting point is to ensure that you have a sound plan. It needs to be more than a business plan for the next year. It must be a strategic plan, targeting a vision beyond the ambition of the present owners. It must work for you, but it must also attract financial backers.

We will advise you whether and how the deal can be done, and we will guide you through the whole process. It can be a long and difficult process because, as you realise, you are actually trying to do two deals. You need to negotiate the purchase from the owners. And you have to attract, and agree terms with, investors and other backers.

Negotiating the purchase may not be straightforward. Of course it helps that the owners are willing to sell, and that you know the business from the inside. But vendors sometimes have an inflated view of what a business is worth. And you may be over-eager to buy it. You need a dispassionate and experienced view of what the business is worth. We will provide that. Managing the vendors� expectations, and keeping your feet on the ground, are part of our role.

You need financial backing, and sometimes a deal can be financed with borrowing alone. (That may include not only bank borrowing but also more sophisticated products, such as invoice discounting or asset finance.) But usually you need a venture capitalist or private equity firm to invest alongside you as shareholders. (They may also provide other finance, such as a subordinated loan.) You want to retain the largest possible shareholding; but outside investors are entitled to an attractive return commensurate with the capital they are investing and the risk they are taking. Our skill lies in devising the right structure, finding the right backers, and creating a deal that works for everyone.

Our corporate finance team works with other specialists in the firm to provide you with the complete service. There are particular tax issues involved in an MBO. You need insurance against the death or illness of key people. This is also the right time to put your personal financial planning and estate planning in order. Our tax planning and financial services colleagues work alongside our corporate finance team to offer all these services.