Management Buy-Outs

As a team, Spectrum has by far the most extensive experience in the region of completing successful MBOs. Whether management are acquiring from a corporate shareholder, or a privately owned business, we have in-depth experience of the full process from inception to completion. The partners have advised on 75+ deals in the region, funding MBOs as principal lender and even participating as management in MBOs. This gives us a unique position in the market place, and an ability to provide the most comprehensive advice to the management teams we act for.

At the outset though, and as with any other transaction we take on, we start by forming an understanding of the team's objectives, and in gaining an in-depth knowledge of the business, its primary markets and key drivers in order to be able to present the business in the most attractive light to funders.

We will hold initial discussions and workshops for management teams on what a buy-out is, how it works and what it means for them. We will advise them on the full process of an MBO from appointing legal advisors, researching and selecting appropriate funders, both bank and private equity, and advising all the way through financial due diligence and on negotiations with the vendor and other parties. We will also use our knowledge of the process to assist in the preparation of a detailed business plan, financial model and management presentations for funders.

When assessing which private equity funds to approach we will use our knowledge of the funds, their investment strategies, sector expertise, cultures and credit processes/deliverability to identify those most appropriate for the transaction, and will then run a covert auction to get the best possible deal for the management team, taking your objectives and future strategy into account i.e. buy and build/roll-out.

It is absolutely critical for the success of the MBO, and to achieve the best deal, that management appoint an experienced corporate finance advisor right at the outset. That advisor will then be with you, and adding value, right up to completion. Our track record in completing successful MBOs is second to none.

Management Roles

In many situations, and especially on larger transactions, management might not be in the lead position for an MBO. The vendor, corporate or otherwise, might appoint their own advisor to look at a range of acquirers, including both trade and private equity.

We provide advice to management teams to assist them in this process, and to introduce them to potential private equity funders at an early stage which will enable them to make the best possible case to acquire the business ahead of a trade buyer. This will generally involve the preparation of a focused strategic growth plan and to work with a limited number of funders who are prepared to put resources to bear to secure the deal. The vendor's advisors might still seek to select the eventual purchaser, but we will request to work with them to ensure management have a say in who that will be, and to get the best possible equity deal.