Management buy-out

Although a highly effective mechanism for achieving a change of control, management buy-outs are notoriously difficult to negotiate. RSM have a deep understanding in managing these complex processes. We’ll help you in acting for the vendor or management team navigate the complexities to reach a successful conclusion.

Through handling MBO transactions for many years, RSM have the skills and understanding to manage these complex processes. MBO’s are complex as management teams find themselves both on the same side as the vendor (essentially working for the existing shareholders) and at the same time in the role of a potential buyer. Equally they are working with finance providers to affect a purchase, and negotiating against those same providers to secure their own terms. We understand how to manage these conflicts and our role is to handle these negotiations in such a way that the deal stays on track.

RSM has a detailed understanding of the leading finance providers to the middle market. Today there is a wide range of funding options available; at RSM we understand funder motivations, return requirements, pricing, capabilities and most crucially which commercial areas to focus on during negotiations. 

We know the private equity market; the positioning, the approach and the differentiating features of individual managers. The private equity market funds a high proportion of successful management buy-outs in the UK; maintaining a detailed and current understanding of the industry’s pricing, structure, terms, personnel and dynamics is core to the advice we provide.

To support effective negotiations we will frequently:

  • advise on the financial model and business plan;
  • analyse relevant transaction structures;
  • manage the due diligence process; and
  • provide commercial input to the legal agreements.

Sourcing and negotiating the most appropriate means of financing a buyout can be time consuming and risky. Working in collaboration with you, our knowledge of the financing market serves to reduce execution risk and strike the optimum deal through an efficient and structured process. 

Our objectivity enables us to negotiate the best deal, allowing you to maintain strong relationships with both the vendors and providers of finance as you head into a new era of ownership.