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Unlocking the Potential of MBOs

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  • Duran-Fernandez, Roberto

Abstract

This paper analyzes Management Buyouts (MBOs), where management teams acquire their companies. It explores various MBO types, such as Traditional, Employee, Management Employee, Divisional, and Buy-in Management Buyouts, each with distinct characteristics. The rationale for MBOs includes investor exit strategies and the alignment of management incentives for better company performance. Key triggers for MBO development include financial sector liberalization and a specialized financial ecosystem. Success factors for MBOs are identified as cash generation capacity and effective management. The paper also discusses the life cycle of MBOs, their impact on productivity and human capital, and the complexities involved, such as information asymmetry and agency problems. This paper contributes to the understanding of MBOs, providing insights that can inform both academic research and practical applications in the dynamic world of corporate finance.

Suggested Citation

  • Duran-Fernandez, Roberto, 2023. "Unlocking the Potential of MBOs," EconStor Preprints 280774, ZBW - Leibniz Information Centre for Economics.
    • Handle: RePEc:zbw:esprep:280774
    as

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    References listed on IDEAS

    as
    1. Grant Fleming, 2018. "Corporate Restructuring and Leveraged Buyouts in the Asia Pacific 1980–2010," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 58(3), pages 283-314, November.
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    6. Julian Lowe & Tony Naughton, 1993. "Understanding The Australian Management Buyout (Mbo) Market," Economic Papers, The Economic Society of Australia, vol. 12(2), pages 97-108, June.
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    8. Pei Sun & Mike Wright & Kamel Mellahi, 2010. "Is Entrepreneur–Politician Alliance Sustainable During Transition? The Case of Management Buyouts in China," Management and Organization Review, The International Association for Chinese Management Research, vol. 6(1), pages 101-121, March.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Management Buyout (MBO); Employee Buyouts (EBO); Management Employee Buyouts (MEBO); Divisional Buyout (DBO); Buy-in Management Buyout (BIMBO);
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation

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