What we do

management buyouts

A Management Buy-Out (MBO) is essentially the purchase of a business by its existing management.

MBOs are similar in all major legal aspects to any other acquisition of a company.

MBOs and Management Buy-Ins (MBIs) are becoming increasingly popular in the Australian market as a means of business succession and sale. It is an established technique for owners wishing to exit their businesses in the UK and USA.

Retirement of business owners will be the main reason for business transfers over the next decade. Planned business succession to other parties will therefore be critical to the takeover and ongoing success of the business. One third of business owners presently believe that they will have major problems in selling their business.

Research by CPA Australia shows that:
• the typical family business owner is 57 years old
• 40% of business owners plan to leave their business
within the next five years
• 66% of them are depending on their business to fund
their retirement, and
• only 38% of SME owners have succession plans.

The Deferred Consideration Insurance product is particularly relevant in these circumstances. It works by the purchaser agreeing with the vendor to pay some of the purchase price at a future date, as opposed to paying the full purchase price in cash on day one. The vendor has comfort that they will obtain their money irrespective of the future performance of the business.

The Mardent Group is one of a limited number of agents in Australia authorised to offer this product.