MBOs & MBIs - Pitfalls
The process may be littered with pitfalls and bear traps, some may cause a temporary delay, whilst others may derail the deal.
However, the most common areas of risk are:
- Trading performance dips whilst management is completing the MBO process
- The business plan over sells or overstates the current trading
- A significant customer walks away.
- Competing bid from trade acquirer
- Disagreement between the management team
- Unfundable sale price
