MANAGEMENT BUYOUTS & GENERATIONAL TRANSFERS OF OWNERSHIP
Silverstone has notable and current experience guiding clients through the complexity of management and family member buyouts (“MBO”). While a MBO is certainly a class of M&A transaction, the aims, roles and relationships of the counterparties are often vastly different from a traditional sell or buy-side transaction.
Invariably, the counterparties in a management buyout have years of personal connection and interdependency both within and outside of the business subject to the buyout. Successfully navigating these relationships, and maintaining the goodwill between the parties required to complete a transaction, as the business is run without being adversely affected by the negotiations, is often more challenging than most transaction parties are inclined to anticipate.
In a majority of management buyouts, management or family buyer groups do not have the liquidity or financial wherewithal to fully fund the acquisition price. In such situations, Silverstone regularly steps in to structure the financing, including the structure of seller notes and earn-outs, as well as bringing in sources of debt and equity capital.
Silverstone excels at managing the entire MBO process, from initial business valuation right through the closing of the transaction.