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MANAGEMENT BUYOUTS AND DIVESTMENT

Steve Thompson and Michelle Haynes

Introduction

The passing of control from ageing or infirm business owners to their senior employees or managers has no doubt always been a part of leadership succession and is probably as old as enterprise itself. However, the management buyout (MBO) – that is the transfer of enterprise ownership to a new, specially created company in which the existing senior managers are significant equity investors – became a recognized business format only in the late 1970s; although it spread rapidly thereafter. From those early beginnings onwards, the MBO was seen as a solution to a variety of problems. As shown in the following chapters in this part of this volume, these included ...

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