Definitions for "Management buy-out"
a group of managers, anticipating future profits, borrows money in order to buy the company they run from its shareholders.
The purchase of a business by its management team, normally with the financial assistance of an institutional investor. MBOs are often targeted as suitable investments by development capital practitioners. (See also Leveraged Buy-out).
The acquisition of a company or a subsidiary by the existing management. It is frequently used as a means of divestment by companies seeking to focus on their core activities. The new owner-managers of the buy-out frequently improve its performance, as they are usually well aware of any remedial action required and have a serious incentive in the form of their equity stake. Additional capital is provided by financial institutions and venture capitalists and also in many cases by allowing other employees to buy shares. In a few instances, all employees have participated in a buy-out; these are sometimes called employee buy-outs.
A transaction in which the current operating manag... Add a comment
a life-changing event and probably the most important investment decision you will ever make