Management Buyout (MBO)

A Management Buyout (MBO) occurs when a company's current managers purchase a significant part or all of the business they oversee. This usually happens when the managers believe the company has strong potential, or the current owners want to sell. The managers typically secure financing to buy the company, allowing them to take control and operate it independently. MBOs align management's interests with the company's success, as they now own it, and can be a strategic move for growth, succession planning, or unlocking value.