Management Buy-In - MBI


DEFINITION of 'Management Buy-In - MBI'

A corporate action in which an outside manager or management team purchases an ownership stake in the first company and replaces the existing management team. This type of action can occur due to a company appearing undervalued or having a poor management team.

BREAKING DOWN 'Management Buy-In - MBI'

There are a wide range of management teams, such as hedge funds and other companies, that look for undervalued companies to purchase. If they find a company that fits with their investment criteria, they will often purchase the company and make it private to unlock the value. More often than not, they replace the management team with their own, which they feel will do a better job at running the company.

  1. Venture Capitalist

    An investor who either provides capital to startup ventures or ...
  2. Management Buyout - MBO

    A transaction where a company’s management team purchases the ...
  3. Shareholder

    Any person, company or other institution that owns at least one ...
  4. Savior Plan

    When management and employees borrow money to invest in their ...
  5. Leveraged Buyout - LBO

    The acquisition of another company using a significant amount ...
  6. Private Company

    A company whose ownership is private. As a result, it does not ...
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