This route often represents an ideal choice for business owners looking to secure the continuation of their company whilst still allowing an exit.
However, it can be fair to say that the MBO landscape has changed significantly with an upsurge in the Employee Ownership Trust model as an ‘alternative MBO’, which can be very tempting from a tax perspective, as well as more staged or gradual MBO take overs.
That is not to say that MBOs are without their challenges, the step up for management teams from employees to owners can often be described as an exciting but turbulent one. To counteract this, it is often useful for the management team to put in place a plan for the first 100 days, which can also be worthwhile when looking for funding for the transaction.
As with all transactions there are pros and cons from both sides, nevertheless it is clear that MBOs of all formats are here to stay and remain an ideal outcome for many business owners looking to exit.
The next step
If you are thinking about a potential exit or would like to know more about raising funding for a potential MBO please get in touch with Andrew Hancock or your local UHY office.