Shareholder & management buyout
Financing to help fund change
Overview
Overview
Management Buyout Financing
A management buyout (MBO) process is a type of acquisition that enables a company’s management team to acquire a significant stake in, or the entirety of, the company from the parent or private owners.
Management buyout financing can be attractive to managers because of the greater financial rewards when one is an owner of the company rather than solely an employee. Management buyouts are also an appealing liquidity option for owners who wish to transition out of a business and may not have a succession plan in place.
Greg Moore, President and CEO of MooreCo, sought a financial partner to support the management buyout plan of his company from Webster Capital as well as a recapitalization.
Typical size, structure, uses, and benefits ▼
Typical size
- Senior debt: $10 million - $300+ million
- Subordinated debt: $10 million - $100+ million
- Preferred equity: $10 million - $50+ million
Typical uses
- Cashing out a family member
- Providing equity ownership to a management team
- Taking a company private
- Employee Stock Ownership Plan (ESOP)
Structural characteristics
- Fixed / floating rate
- Unsecured / secured
- Maturities of 3 to 30+ years
- Amortizing or bullet maturities
- Senior debt, alongside subordinated debt / equity (if needed), for a seamless solution with a single, relationship-oriented capital provider
Issuer benefits
- Supportive, patient, relationship-oriented partner
- Deep pockets to provide follow-on capital to fund your future growth
- Understanding the complexities of your particular business
- Capacity to fund across your capital structure with senior debt, subordinated debt, and preferred equity
