Management Buy Ins and Buy Outs

Our MBO and MBI Legal Services

Advising the Management Team

When a management team acquires the business they run, speed and discretion are essential. We guide you through structuring the newco, negotiating the share purchase agreement, and managing the due diligence process. Because you already know the business, due diligence is typically more focused than in a third-party sale, and we work efficiently to keep your deal on track.

• Formation and incorporation of the acquisition vehicle (newco)
• Negotiation and drafting of the share purchase agreement
• Confidentiality agreements and heads of terms
• Advice on management equity contributions and incentive arrangements
• Coordination with funders, banks, and private equity investors

Advising Sellers

Selling your business to your management team can be a smoother and more cost-effective exit than a third-party sale. We protect your position throughout, advising on warranties, deferred consideration, loan notes, and any ongoing involvement you retain in the business after completion.

• Drafting and negotiating the share purchase agreement and disclosure letter
• Structuring deferred consideration and earn-out provisions
• Advice on seller loan notes and security arrangements
• Protecting your interests alongside management equity and funder debt
• Ensuring warranties are proportionate given management’s existing knowledge

Management Buy-Ins (MBIs)

A management buy-in occurs when an external management team acquires a business, often backed by private equity. These transactions tend to be more complex, as the incoming team lacks the seller’s institutional knowledge and due diligence is therefore more extensive. Our MBI solicitors advise incoming management teams, sellers, and investors on all aspects of the transaction. Learn more about how our corporate restructuring advice can support your wider plans.

• Structuring the acquisition and investment arrangements
• Negotiating warranties and indemnities to reflect limited prior knowledge
• Advising on funding structures including private equity and bank finance
• Reviewing and drafting investment agreements and shareholder arrangements

Funding and Finance Structuring

Most MBOs and MBIs involve a combination of management equity, bank lending, private equity, and seller deferred consideration. We work alongside your financial advisers to ensure the legal documentation accurately reflects the agreed funding structure and that the priority of payments between all parties is clearly set out. Our finance and banking team can advise on facility agreements, inter-creditor arrangements, and debentures.

• Facility letters and inter-creditor deeds
• Debentures and security documentation
• Loan notes and deferred consideration mechanics
• Advice on private equity investment agreements

Shareholders’ Agreements and Governance

Once the transaction completes, the management team’s relationship as co-owners needs to be clearly documented. We draft robust shareholders’ agreements that address decision-making, reserved matters, exit provisions, and what happens if a shareholder leaves. Getting this right at the outset prevents disputes later.

• Shareholders’ agreement drafting and negotiation
• Articles of association
• Leaver and good leaver provisions
• Board governance and reserved matter thresholds

Due Diligence and Transaction Management

We manage the legal due diligence process efficiently, focusing on the areas of genuine risk rather than generating unnecessary work. Our team coordinates with all parties’ solicitors to keep the transaction moving and typically expect a well-prepared MBO to complete within six to eight weeks of agreeing heads of terms.