Buying out a business partner - Management buy outs

Hyde House offers a full advisory and relationship based service; we can negotiate the terms and strategically plan an effective and affordable payment structure to ensure a successfully structured and amicable buy-out of or buy into the business.

Don’t assume that the shareholders agreement is set in stone

Utilising the skills of the right negotiator who understands what you are trying to achieve will make all the difference to the transaction and is vital to achieve fair distribution of funds at completion despite what might have previously been agreed. Hyde House can act as a third party to mediate in MBO / MBI (Management Buy-Out Management Buy-In) discussions while protecting your best interests.

Buying out a business - Determining the worth of a partner and the structure of the management buy-out

In order to determine the value of individual shareholdings a valuation of the business can be provided by Hyde House. However, selling substantial equity in the business to managers will be constrained by their ability to raise significant funds and therefore the market valuation will only be a guide if you are keen to involve long term management in a buy-out rather than sell to e.g. a trade buyer.

Understanding the goals and targets of the management buy-out

Before beginning the buy-out process it is imperative that goals and targets are set, this should not only cover the maximum consideration management will be expected to pay but should focus on the structure of the payment/s and whether the business is to be bought out completely or whether the owner is to retain an interest in the business.

Financing may be essential to a successful completion. Hyde House can help you the business owner and the management team access the funds required and may be able to negotiate a deferred payment plan that may bring more certainty to a deal.

Mediation and the importance of a third party

Understandably the shareholders of a business will be heavily emotionally invested in the company and will of course be very wary of not receiving the full consideration they feel they deserve.

These emotive pressures can often lead to personality clashes in an un-constructive manner and differences can escalate crashing the deal and negatively affecting the running of the business after the failed transaction. A professional third party who is not emotionally involved in the buy-out process can bring clarity and understanding to the discussions and ensure a fair agreement is reached and the buy-out completed in a timely fashion.

Hyde House can offer assistance throughout every step of the deal resolving the issues that will be encountered and manage the relationship of the shareholders and other business professionals such as solicitors and accountants. Hyde House will ensure that the business professionals involved e.g. solicitors acting for all parties and accountants work in unison towards the common goal of a successful completion.

Can Hyde House assist me in my management buy-out?

Call today to arrange a no-obligation telephone consultation in complete confidence and receive free advice on how your buy-out could be structured, funded and completed with our professional assistance.