Management Teams and Senior Executives
Often, incumbent managers or management teams have the opportunity to acquire the business they are running from the current owner. This can be a tremendous opportunity, but one fraught with complexity – financial, personal, and ethical issues abound.
One common mistake that managers often make is assuming that all deal structures are similar in terms of results, and that all financing sources and capital structures will generate similar values for the managers in a management buyout (MBO).
The equity ownership percentage in an MBO can vary by factors of four or five: 5% ownership versus 20% or 25% ownership. By carefully engineering a capital structure, purchase price and terms based on current financial market conditions, a manager can then maximize personal economics. Grace Matthews helps management teams do just that.