While in an MBO, the Seller and the Buyer know each other as well as the company, great care must be taken in an MBI on the selection of management suitable to take over.
This is extremely important, both for the Seller who wants his company to be carried on in the best possible way, as well as for the manager taking over, whose future is tied inseparably to the future development of the company. Technical, human and financial aspects are to be considered here equally.
On the side of the management taking over, the development of workable strategies for the takeover of the company is paramount. In an MBO of a company which is in crisis, particularly to the banks the question must be answered how the management, which has already determined the company's fortunes up to now, proposes to overcome the crisis.
Moreover, tax implications become relevant which must be considered in the weighing between a one-step or a two-step MBO / MBI and diverse takeover model types.
Our approach is as follows:
- Defining a request profile of the candidate
- Company evaluation
- Identification of suitable candidates (Long List)
- Selection in consultation with the Buyer
- Anonymous establishment of contact with the selected candidates
- Identification of suitable candidates with the Buyer (Short List)
- Creation of an Information Memorandum for the interested parties
- Company inspection
- Purchase price negotiation
- Structuring of takeover/financing assistance
- Conclusion of Contract
In addition to well-founded business plans, financing issues are of particular importance in this context. A solution for the frequent combination of circumstances - that the purchaser with a relatively minimal equity investment acquires comparatively large manufacturing companies - may represent an externally financed Leveraged Buy-Out (LBO) or Leveraged Buy-In (LBI) with the help of investors or creditors - if necessary, in combination with Sale and Leaseback Procedures.