D6.435 Management buyout—overview
A management buyout (MBO) occurs when the management team of an existing company purchase that company. They will typically establish a new company (Newco) which will subsequently acquire their employer's business or company (Target).
An MBO can be structured in one of the following three main ways:
- Ìý
(a)ÌýÌýÌýÌý as a 'share' deal, where Newco acquires Target's share capital
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(b)ÌýÌýÌýÌý as an 'assets' deal, where Newco acquires the trade and assets of Target, or
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(c)ÌýÌýÌýÌý as a 'hive down' (see D6.315–D6.331). In this case, the Target business is transferred to a new subsidiary of that company (Hiveco) and the new subsidiary is then sold to Newco (as a share
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