A management buyout (MBO) is a structured financial transaction in which a company's management team acquires a significant portion or the entirety of the company's ownership from its current owners. This type of buyout typically occurs when the management team, who are already familiar with the company's operations and strategy, has the opportunity to take control and continue to run the business independently.
While MBOs offer numerous advantages, they also present some inherent challenges which should be assessed.
In this article for Philadelphia Business Journal, Brian J. Sharkey, Director-in-Charge, Transaction Advisory and Business Valuation, outlines six critical questions to consider if you're evaluating an MBO.