Brief Definition
A Management Buy-In (MBI) is a type of acquisition where an external management team buys a significant stake in a company and takes over its management. This new management team is typically composed of experienced professionals who believe they can improve the company’s performance and value.
Further Explanation
A Management Buy-In (MBI) is a type of acquisition where an external management team buys a significant stake in a company and takes over its management. This new management team is typically composed of experienced professionals who believe they can improve the company’s performance and value. An MBI can occur for various reasons, such as when the current management wants to exit, or the company is underperforming and needs new leadership.
Example:
Consider a struggling manufacturing company whose owners are looking to retire. A group of experienced managers from outside the company sees an opportunity to turn the business around. They raise the necessary capital, purchase a controlling interest in the company, and take over its management. The new team implements changes to improve operations, cut costs, and increase profitability, aiming to boost the company’s value over time.