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MANAGEMENT BUYOUTS

An introduction and overview

Mike Wright, Kevin Amess, Nick Bacon, and Donald Siegel

Introduction

Management buyouts (MBOs) are part of a family of related forms of transactions where a firm is transferred to a new set of owners, among which senior managers become significant equity holders. To some extent, MBOs are not new. Buyouts of sleeping partners by mill owners and private placements of listed corporations have been consummated for over a century (Wright et al., 2000; Toms & Wright, 2002). What is relatively new is the growth of the phenomenon and the role of specialist equity and debt providers since the late 1980s. As a result, from being a peripheral intellectual curiosity, private equity (PE) and MBOs have become ...

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