MBOs & MBIs - The Process
There is no such thing as a typical process, however, the following stages will be involved in each transaction and some will run concurrently.
- Identification that an opportunity exists and initial “green light" from the vendor
- Evaluation of the opportunity
- Selection of corporate finance and legal advisers
- Preliminary valuation of the business plan
- Preparation and financial structuring
- Vendor negotiations
- Targeting of financial backers (banks and private equity investors)
- Capital raising
- Presentations and meetings with investors
- Selection of preferred investor
- Negotiation of Heads of Terms
- Targeting and presentation to banks
- Due diligence (financial, commercial, legal and management)
- Structuring the Newco
- Selection of non executives by the private equity investors
- Investment approval by the bank
- Project management to completion
- Completion of the deal
