Management buy-ins

MBIs are considered to be more risky than MBOs and in fact many funders will not look at MBIs at all in the current economic climate. The likelihood of financial failure of an MBI is greater than with an MBO given the lack of knowledge of the business being acquired. It is therefore essential that any MBI is led by an experienced CEO with a proven track record and in-depth experience of the target's market.

It is often helpful if the MBI candidate is prepared to make the deal a Buy In Management Buy Out (BIMBO), involving some of the existing team buying into the equity. This reduces the overall risk associated with the transaction by combining knowledge of the business with external management expertise.

Due to the risky nature of MBIs it is essential that an experienced set of advisers guide the management team through the complex process. Momentum is uniquely placed to assist in this regard.