Management Buyouts with PLS Solicitors
PLS Solicitors can provide you with a bespoke service tailored to you and your business’ needs.
An MBO is where the existing management buys the business they are employed in from the current owners. These sorts of purchases are almost always funded by borrowed money.
The management team will normally be expected to invest a substantial sum personally in the acquisition. One of the reasons some MBOs have been so successful in the past is that they often relate to a long neglected subsidiary of a large group of companies. All that is required to improve the position is an investment of fresh capital and initiative. The management team are in an perfect position to provide this, having functioned in the business and therefore know a great deal about it. Although uncertain, the MBO “industry” has grown substantially over the last ten years. Buying managers have to be alert to the great potential for conflict between their role as directors and employees of the company accountable to the current shareholders and their role as eventual owners.
Opportunities to carry out a buyout arise for a variety of reasons:
– The owners of the business may wish to retire.
– The business may no longer be considered as core to the whole company or group.
– The business as a whole may be having financial difficulties and the owners may wish to sell off assets to improve cashflow.
A management buyout is generally carried out by incorporating a new company (“Newco”) regardless of whether or not the business being acquired (“the Target”) is incorporated (a limited company) or not.
If the Target is a company (“Target Company”), Newco becomes the new holding company for shares in the Target Company, frequently attaining all the shares.
If the target is not incorporated (“Target Business”) then Newco will obtain the trade and assets of the Target Business.
Regardless of whether the Target is a company or an unincorporated business the buyout team, along with any private equity investors, will take shareholdings in Newco. Sometimes the vendors will keep a minor shareholding by becoming shareholders in Newco.
PLS Solicitors specialise in advising on the complex area of corporate law, especially Management Buyouts. We offer a friendly, efficient and effective legal advice on any area of corporate law.
- We explain the process in plain english, no legal jargon.
- We adopt an understanding and methodical approach when dealing with each individual case.
- Our office hours are 9am to 7pm Monday – Friday and 9am to 4.30pm Saturday and Sunday
- We are fast. Because of our speed, we work as a nominated solicitor for many of the UK's largest developers.
- We have a team of 100+ staff based in the UK
- All work is carried out in-house by a member of our team.
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