The motivation to acquire a company through buyout is the conviction that the company has untapped potential. Investors believe they possess a set of skills, the use of which will drive company value. The purpose of a buyout transaction may be to reorganize the company, ensure faster company growth, change its strategy or become an owner of one’s business.
Having appropriate knowledge and experience gained during various capital transactions, CMT Advisory offers comprehensive support in the process of MBO, MBI, and LBO management buyouts as well as ownership buyouts during different stages of taking over an enterprise, and can assist both the buyer and the seller.
The aim of our activities is to maximize the benefits for our Customers and to protect their interests, from the stage of drafting the concept of the deal, through obtaining financing, up to the establishment of future ownership relations.
THE POINT AND SCOPE OF MANAGEMENT AND OWNERSHIP BUYOUT
We provide advisory services to groups of managers and employees who undertake to buy a controlling interest in the company they work at (MBO – Management Buyout) or another one, in which they would like to use their know-how and expertise (MBI – Management Buy-In). We support investors in deals which use both their own funds, as well as in deals employing a high share of debt financing (LBO – Leveraged Buyout).
Management Buy Out (MBO) is the acquisition of a company by company managers buying out a company’s interests or shares from current owners. The process is supported by an entity, the capital partner, providing financial means required to carry out the deal.
We advise entrepreneurs who plan a buyout or want changes in the shareholding of the current ownership structure. We carry out transactions between individual shareholders as well as buyouts of controlling interests for ownership groups. In particular, we use years of experience gained from advising family companies carrying out transactions forming succession processes resulting in a change of the ownership structure.
Ownership buyout is the acquisition of company interests or shares from a current co-owner, or a change in the parity of currently held interests or shares, to achieve investment and decision-making independence regarding company development strategy by one of the owners.
ORGANIZATION OF A MANAGEMENT AND OWNERSHIP BUYOUT PROCESS
Our management and ownership buyout services cover in particular:
- Development of the transaction scheme with a detailed road map,
- Preparation of buyout strategy and financial projections of all planned operations,
- Evaluation of company value,
- Requirements for capital,
- Executing the procedure for obtaining external financing,
- Providing support during negotiations with current owners / co-owners,
- Providing services to finalize the transaction.
A company buyout process can be divided into two key phases: phase of preparing the buyout, and transaction negotiation and finalization phase.
The first step in buying a company is the evaluation of the attractiveness of the investment. One of the key elements in the process is to secure financing. CMT Advisory offers support in defining capital requirements, following which it establishes relations with capital providers. As CMT Advisory works hand in hand with investment funds, brokerage houses, auditors, legal and tax firms, as well as industry experts, we can guarantee our offer will be comprehensive.
After performing the company’s valuation and due diligence verifying the business, financial, and legal condition of the enterprise, partners start negotiations to agree the purchase price of investments or shares, and determine future ownership relations between the stakeholders.
CMT Advisory offers consultancy services to select the optimal transaction form. At the time of securing funding we advise on the selection of the appropriate capital structure, by obtaining capital from both private equity funds, as well as through debt financing, in the case of LBOs (Leveraged Buyouts). Future ownership relations are determined on the basis of the specificity of a company’s business, as well as the balance of power characteristic for a given market. During this stage, we use years of experience gained from advising public companies, as well as enterprises existing on the private market of family companies.