Management Buyout - MBO

Filed Under » , , , ,
Dictionary Says

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 Says

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.

Articles Of Interest

  1.

    Key Players In Mergers And Acquisitions

    Strategic acquisition is becoming a part of doing business. Discover the different types of investor groups involved.

  2. What Are Corporate Actions?

    Be a savvy investor - learn how corporate actions affect you as a shareholder.

  3. Why Successful Business Owners Sell Out

    Learn the motives that drive companies into the arms of an acquirer.

  4. How The Big Boys Buy

    Learn what those in-the-know look for when acquiring a company.

  5. The Basics Of Mergers And Acquisitions

    Learn what corporate restructuring is, why companies do it and why it sometimes doesn't work.

  6. What Is Private Equity?

    This investment vehicle attracts wealthy investors to increase the value of portfolio companies.

  7. War's Influence On Wall Street

    Blitzkrieg? Dawn raids? Sounds like the markets and the battlefield have a few things in common.

  8. Cashing In On Corporate Restructuring

    Companies use M&As and spinoffs to boost profits - learn how you can do the same.

  9. Why Companies Stay Private

    Many private companies prefer to stay private and find alternate sources of capital. Find out what firms have to gain by eschewing the windfall from a flashy IPO.

  10. Get An Academic Finance Career

    Working nine months a year and earning a six-digit salary might seem like the high life, but these jobs are not easy to come by.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Network Effect

    A phenomenon whereby a good or service becomes more valuable when more people use it. The internet is a good example...

  2. Racketeering

    Racketeering refers to criminal activity that is performed to benefit an organization such as a crime syndicate. Examples of racketeering activity include...

  3. Lawful Money

    Any form of currency issued by the United States Treasury and not the Federal Reserve System, including gold and silver coins, Treasury notes, and Treasury bonds. Lawful money stands in contrast to fiat money, to which the government assigns value although it has no intrinsic value of its own and is not backed by reserves.

  4. Fast Market Rule

    A rule in the United Kingdom that permits market makers to trade outside quoted ranges, when an exchange determines that market movements are so sharp that quotes cannot be kept current.

  5. Absorption Rate

    The rate at which available homes are sold in a specific real estate market during a given time period.

  6. Yellow Sheets

    A United States bulletin that provides updated bid and ask prices as well as other information on over-the-counter (OTC) corporate bonds...
Trading Center