Management Buy-Ins
A Management Buy-In is like a Buy-Out except that management from outside the target company make the acquisition.
Candidates must have experience of successfully managing businesses, and preferably in the same sector as the acquisition target.
For vendors, the Management Buy-In can sometimes represent the most viable exit route, as not all Companies have a logical trade buyer and/or a management team capable of running it, without new management coming in.
A Management Buy-In can be funded by debt and deferred consideration, or for a market leading Company with a strong management team, can be Private Equity led
A key dynamic of funding a Management Buy-In transaction is to include key members of an existing management team in the equity structure, as it is a must for debt/equity funders that key managers are aligned with the Buy-In candidates(s) in terms of risk reward.
Management Buy-Ins – Our Service
A Management Buy-In is often relatively time consuming, complex in nature, and there can be several unexpected developments as progress is made towards completion.
It is, therefore, key to appoint corporate finance advisers who are focused on advising you and have the experience to successfully lead you through every stage of the transaction.
We are specialists in advising on and raising funds for Management Buy-Ins and are experienced in raising debt and Private Equity funding where appropriate for this kind of transaction.
Transactions can be vendor led, or management led transactions, so in terms of advice, valuation, structuring and funding, we are able to take appointment from either party to the transaction.
Typically, we will lead all stages of the Buy-In, including:
- Establishing the feasibility of the Buy-In, thereby ensuring that any other put forward is sufficiently attractive from the vendor’s perspective, realistically priced, structured, and fundable.
- Negotiating the main terms of the transaction, including price and structure.
- Negotiating management equity terms between the Buy-In candidate(s) and the incumbent management team.
- Advising on the most appropriate funding structure for the transaction.
- Assisting in the preparation of presentations for funders and seeking/negotiating the debt and equity requirement.
- Delivering our extensive experience to ensure the project is managed professionally and efficiently from start to a successful completion.
Our input is key at the feasibility stage
We see many instances where vendors and Buy-In teams spend considerable time agreeing a transaction before we get involved, where the price of structure cannot be funded, as negotiations and agreements are made with a lack of knowledge of the debt and equity funding markets.
A Management Buy-In is the most complex transaction to obtain funding for, with many mainstream debt funders unwilling to fund Buy-In transactions.
The key is the feasibility stage, ensuring that valuation and structuring is done in line with what’s possible in the debt/equity markets.
It vital, therefore, a vendor or management team contact us for a feasibility review before anything else is moved forward.
To make an enquiry about Management Buy-Ins, please contact one of our Directors using the details below.
Management Buy-ins Case Studies
Window and door manufacturer secures new investment – deal supported by prominent advisers
A Leeds-based window and door manufacturer has secured new investment in a deal supported by Yorkshire advisers.
Alternative Windows was established in 1988 by shareholders and directors Nigel Fletcher and Darren Barraclough, and is now a major player in supplying uPVC and aluminium doors and windows, largely into the commercial markets.
Management Buy-In for Hull-Based Industrial Roofing and Sheet Metal Fabrication Firm
Castle Square Corporate Finance advises Private Investor, David Pierce (Welton Holdings Limited) on his investment in a distinguished industrial roofing and sheet metal fabrication enterprise in Hull.
Castle Square advise on Leveraged buy-in of specialist steel supplier
Sheffield based businessman Darren Bradley has acquired a controlling stake in Masteel UK Limited for an undisclosed sum, in a deal where the Buyer was advised by Yorkshire based Corporate Finance specialists, Castle Square Corporate Finance.
Castle Square advise Buy-In team to acquire stakes in Manufacturing Specialist
Castle Square advise Buy-In team to acquire stakes in Manufacturing Specialist
A Management Buy-In, led by Marie Cooper and Chris Brown has acquired a controlling stake in plating and surface technology specialist NiTEC UK and Spire Laboratories Ltd, a test house specialising in validation & certification for the surface treatment industry, both of which are based in Chesterfield. As part of the transaction Marcus Hill and David Brown, the founding shareholders, are staying with the businesses and retain shareholdings.
Management secure the future of leading fastener company
Castle Square advised on the Management Buy-In/Buy-Out of Midlands based Alca Fasteners Limited, a manufacturer and exporter of large diameter high integrity bolting. The deal was financed through an innovative debt funding package arranged by SME Capital and provided by Hadrians Wall Capital. Legal advice was provided by Peter Crawford and team from Freeths.
Sheffield based entrepreneur leads the way
Kevin Parkin, the Sheffield based entrepreneur and former Managing Director of DavyMarkham, led a Management Buy-In/Buy-Out of Midlands based manufacturer – Precision Technologies International Limited (PTI). Backed by Private Equity Firm Panoramic Growth Equity, with debt funding provided by Finance Birmingham and Santander. Legal advice was provided by Ben Hendry and team from Nabarro’s.