Management Buyout - MBO
Definition of 'Management Buyout - MBO'An instance whereby the managers and/or executives of a firm purchase a controlling interest in the company from existing majority shareholders. In most management buyouts the management group is required to borrower large sums of capital in order to afford to payout existing shareholders, which as a result, leads to the firm holding a greater amount of debt on its balance sheet. |
|
Investopedia explains 'Management Buyout - MBO'In the majority of MBO cases, management will buy out all the outstanding shareholders and take the company private, under the belief that the management group has the expertise to lead the business successfully if it controls ownership. Quite often, management will team up with one or more private equity firms to buyout the business due to the buyout experience required to facilitate such a transaction. |
Related Definitions
Articles Of Interest
-
Key Players In Mergers And Acquisitions
Strategic acquisition is becoming a part of doing business. Discover the different types of investor groups involved. -
What Are Corporate Actions?
Be a savvy investor - learn how corporate actions affect you as a shareholder. -
Why Successful Business Owners Sell Out
Learn the motives that drive companies into the arms of an acquirer. -
How The Big Boys Buy
Learn what those in-the-know look for when acquiring a company. -
The Basics Of Mergers And Acquisitions
Learn what corporate restructuring is, why companies do it and why it sometimes doesn't work. -
Earnings Guidance: Can It Accurately Predict The Future?
Explore the controversies surrounding companies commenting on their forward-looking expectations. -
Mergers And Acquisitions: Understanding Takeovers
In the dramatic world of M&As, battleground terms meld with bizarre metaphors to form the language of the game. -
7 Unconventional Ways Businesses Can Borrow Money
Find out how your business can get the money it needs - even when the bank says "no". -
Warding Off Hostile Takeovers
The purpose of this article is to provide a general overview of hostile corporate takeovers, while highlighting a general course of action against such activity. This article provides basic ... -
Joh. A Benckiser Looks To Corner The Coffee Market
Joh. A Benckiser is paying a huge price for the European coffee maker. What does this mean for the rest of the world's coffee manufacturers?
Free Annual Reports