Employee Buyout

An employee or management buyout involves transferring ownership of a business to its existing management team or employees.

 

Common structures include:

• Management Buyouts (MBOs): Senior managers acquire ownership, typically funded through a mix of equity and debt.

• Employee Share or Ownership Plans: Employees gradually gain ownership through a structured share arrangement or trust.

 

Buyouts can be an effective exit option where there is strong internal leadership and continuity is a priority. They can also improve engagement and long-term commitment.

 

However, these transactions involve complex financial, legal, and funding considerations and are not suitable in every situation. Careful planning and structuring are essential to protect value and ensure a successful outcome.