Management-Buy-in
In a management buy-in, the takeover of the company shares is carried out by managers who newly join the company.
A management buy-in ("MBI") is the takeover of a company by an external management. This can involve entire management teams, but also individual managers. This sounds threatening at first, but it can also be an elegant instrument for a structured succession process. The initiative usually comes from the entrepreneur who wants to organise his or her succession. In rare cases, the external management itself becomes active and makes an offer to take over part or all of the company. Comparable to the procedure for a MBO, the external management also usually works teams-up with a Private Equity Fund to finance the acquistion.
MBI as an alternative way of succession
In the context of a succession process, an MBI can be an interesting variant if
In the cases mentioned above, it may make sense to start looking for a suitable external successor. An MBI candidate is not only expected to take over the management position, but also to participate in the company, i.e. to take on an entrepreneurial role himself. Since only very few managers have sufficient capital of their own to be able to finance the purchase price desired by the entrepreneur, in the case of an MBI an investment company is usually involved in the succession process.
MBI und Beteiligungsgesellschaften
The advantage of involving an investment company for the MBI manager is that he has an experienced and financially strong partner at his side who ensures the professional implementation of the sale. In addition, investment companies usually offer MBI managers very attractive investment conditions that allow them to participate disproportionately in the company's success with a fair capital investment.
For the selling entrepreneur, the sale to a team of MBI and investment company is advantageous, as he can trust that the sales process will be implemented professionally, quickly and with a high degree of confidentiality.
An MBI does not in any way have to mean that the existing management in the company is replaced. This is usually only the case in restructuring processes. Rather, the MBI manager complements the existing management and takes over the role of the former shareholder.
Alternatives
A combination of management buy-out and management buy-in is also conceivable. This variant is also known as a "BIMBO". A BIMBO is an option if the company has suitable and interested managers for an MBO, but the management team needs to be supplemented in individual positions. This alternative can also be interesting if the company is facing a development step for which the necessary know-how is not or not sufficiently available in the company. An example could be the establishment of production or sales branches abroad. Here it can make sense to supplement the existing management team with someone with the relevant experience who is also willing to personally share in the entrepreneurial risk.
For managers who want to take the step from employee to entrepreneur, an MBI can be a highly attractive career move. While actively seeking MBI candidates were rare until a few years ago, today there are many highly qualified managers looking for suitable companies or succession situations.
Private Equity Funds are also constantly on the lookout for qualified managers who are interested in MBI projects.