DEFINITION of 'Buy-In Management Buyout - BIMBO'

Buy-In Management Buyout (BIMBO) is a form of a leveraged buyout (LBO) that incorporates characteristics of both a management buyout and a management buy-in. A BIMBO occurs when existing management — along with outside managers — decides to buy out a company. The existing management represents the buyout portion while the outside managers represent the buy-in portion.

BREAKING DOWN 'Buy-In Management Buyout - BIMBO'

Buy-In Management Buyout (BIMBO) is a term that originated in Europe to describe a type of LBO that combines new external management with internal management to refresh the direction of the company and streamline operations. This option provides advantages of a buy-in and a buyout. The transfer will be made much more efficiently and without disruption, because the existing members of management are already familiar with the business. This management buyout is complemented with management buy-in, which results in the influx of leaders with expertise to fill in areas of need, whether in new product or service development, marketing, operations management or finance.

Taking Care of a Buy-In Management Buyout

New and existing managers must get along for the BIMBO to work. Energized new managers may have novel ideas that they wish to implement right away, while existing managers may fall into turf-protection mode. Employees may take sides. Conflicts are inevitable, as they are in all organizations, but if they become too pronounced or distracting the business may not run as envisioned before the transaction took place. An LBO involves an increase of debt on the balance sheet that must be managed responsibly by the management team. The risk is that debt service may not be handled smoothly, causing some financial stress in the new company. However, since the group of managers are now owners of the company, they have every incentive to behave like owners, which means making rational decisions to increase odds of success.

RELATED TERMS
  1. Management Buy-In - MBI

    A management buy-in takes place when an outside manager team ...
  2. Buy-In

    A buy-in is when an investor is forced to repurchase shares, ...
  3. Institutional Buyout - IBO

    An institutional buyout is the acquisition of a controlling interest ...
  4. Employee Buyout (EBO)

    An employee buyout (EBO) may refer to a restructuring strategy ...
  5. Leveraged Buyout - LBO

    The acquisition of another company using a significant amount ...
  6. Manager of Managers - MoM

    A manager of managers (MoM) approach is a type of oversight investment ...
Related Articles
  1. Tech

    10 Most Famous Leveraged Buyouts

    Learn about the boldest, riskiest leveraged buyouts in history and how they either become famous for failing miserably or making billions.
  2. Financial Advisor

    Preparing for a Career as a Portfolio Manager

    Find out what it takes to win a spot in one of the most coveted financial careers, portfolio manager.
  3. Investing

    Effects Of Interest Rate Hikes On Private Equity

    Private Equity firms would be wise to lock in current interest rates on their debt payments in anticipation of rate hikes.
  4. Investing

    The Biggest Private Equity Firms in New York City

    Discover the top four largest private equity firms, including Goldman Sachs, headquartered in New York City, as ranked by total assets raised since 2010.
  5. Investing

    Evaluating A Company's Management

    Financial statements don't tell you everything about a company's health. Investigate the management behind the numbers!
  6. Personal Finance

    A project manager's qualifications and career path

    Learn about a project manager's job, the qualifications necessary for the position, and the most common careers for these professionals.
  7. Insurance

    Using Insurance in a Business Succession Plan

    How to use life and disability insurance to help fund a business succession or buyout plan.
  8. Personal Finance

    Project Manager: Job Description & Average Salary

    Discover more about the specific tasks that project managers are responsible for and the average salary that can be expected in such a position.
  9. Investing

    World's Top 10 Private Equity Firms (APO, BX)

    Obtain important information about the world's top ten private equity firms ranked as of 2015, including their investment focus and portfolio assets.
RELATED FAQS
  1. How are leveraged buyouts financed?

    Understand the basics of a leveraged buyout, who is involved in executing the transaction and some of the various ways to ... Read Answer >>
  2. Why Isn't My Stock Trading at the Buyout Price?

    An acquisition or merger does not necessarily mean the deal will be resolved as originally stated. Read Answer >>
Hot Definitions
  1. Investment Advisor

    An investment advisor is any person or group that makes investment recommendations or conducts securities analysis in return ...
  2. Gross Margin

    A company's total sales revenue minus its cost of goods sold, divided by the total sales revenue, expressed as a percentage. ...
  3. Inflation

    Inflation is the rate at which prices for goods and services is rising and the worth of currency is dropping.
  4. Discount Rate

    Discount rate is the interest rate charged to commercial banks and other depository institutions for loans received from ...
  5. Economies of Scale

    Economies of scale refer to reduced costs per unit that arise from increased total output of a product. For example, a larger ...
  6. Quick Ratio

    The quick ratio measures a company’s ability to meet its short-term obligations with its most liquid assets.
Trading Center