It is a desire of many managers to lead a company not on behalf of others, but as an independent manager and owner. A Buy-Out can make this possible. It is usually an exciting, once-in-a-lifetime opportunity for managers to own a significant stake in their business. Thereby they can work as entrepreneurs on own risk and make substantial decisions personally. However it can also be a major distraction, because managers must resolve many important issues regarding the structure of the transaction and the raising of funds, while attending to the normal running of the business.
The main objective of this work is to obtain a comprehensive overview of theoretical (literature review) and practical (case study analysis) success factors for Buy-Outs.
In the first part different Buy-Out forms are defined and distinguished from each other regarding their special features. Afterwards the recent development of Buy-Out financings in the UK and in Europe is analysed, whereby the main focus is on the German market.
The second part is concerned with the structure and substantial elements of a Buy-Out. Here the process and the elements of the financing structure as well as the involved persons and their motives are highlighted.
The third and main part summarises the critical success factors for management and financial investor using a “checklist for success”. Hereupon the results from the case study analysis of VITALIS Ltd. are presented containing the four key success factors for their Management Buy-Out.
Inhaltsverzeichnis (Table of Contents)
- Executive Summary
- Introduction
- Literature Review
- Definition and Background of individual Buy-Out forms
- Management Buy-Out (MBO)
- Management Buy-In (MBI)
- Leveraged Buy-Out (LBO)
- Buy-In-Management-Buy-Out (BIMBO)
- Employee-Buy-Out (EBO)
- The Buy-Out Market in the UK and Europe
- Buy-Out Investments in Germany
- Structure and Substantial Elements of a Buy-Out
- The Process of a Buy-Out Transaction
- Elements of the Financing Structure
- Critical Success Factors
- Checklist for Success
- Most Important Success Factors for the Management
- Most Important Success Factors for the Financial Investor
- Key Success Factors
- Well-balanced and Experienced Management Team
- Balanced Financing of the Buy-Out
- Agreement in Negotiations and Aims
- Equity Participation of the Management
- Conclusions and Outlook
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This dissertation focuses on critical success factors for buy-outs, exploring why they are a prevalent financing model. Its primary objective is to test theoretical arguments from the literature review through a practical case study analysis. The main themes of this work include:- Different forms of buy-outs (e.g., MBO, LBO, MBI)
- The Buy-Out market dynamics in the UK, Europe, and Germany
- The process and structure of Buy-Out transactions
- Key success factors for Buy-Outs, including those for both management and financial investors
- The application of Buy-Outs in various business scenarios
Zusammenfassung der Kapitel (Chapter Summaries)
- Executive Summary: This section provides a brief overview of the dissertation, highlighting the objectives, methodology, and key findings. The analysis of a Management Buy-Out case study (VITALIS Ltd.) serves as the basis for combining theoretical and practical insights to formulate a “checklist for success” for Buy-Outs.
- Introduction: This chapter introduces the topic of Buy-Outs and sets the stage for the subsequent discussion. It emphasizes the relevance and growing popularity of this financing model.
- Literature Review: This chapter delves into the definition and background of various Buy-Out forms, including Management Buy-Out (MBO), Management Buy-In (MBI), Leveraged Buy-Out (LBO), Buy-In-Management-Buy-Out (BIMBO), and Employee-Buy-Out (EBO). It explores the characteristics and applications of each type. The chapter also examines the development of the Buy-Out market in the UK and Europe, highlighting its significant growth.
- Structure and Substantial Elements of a Buy-Out: This chapter explores the complete process of a Buy-Out transaction, from initiation to completion. It outlines the five stages of the process and emphasizes the crucial role of participation models, due diligence, and contractual agreements. The chapter also examines the financing structure, including various forms of equity capital and debt financing.
- Critical Success Factors: This chapter delves into the critical success factors for Buy-Outs, both from the perspective of the management team and the financial investor. It presents a checklist for success based on both theoretical and practical insights. The chapter discusses key success factors such as a well-balanced management team, balanced financing, agreement on goals, and equity participation of the management.
Schlüsselwörter (Keywords)
Buy-Out, Management Buy-Out (MBO), Leveraged Buy-Out (LBO), Management Buy-In (MBI), Buy-In-Management-Buy-Out (BIMBO), Employee-Buy-Out (EBO), Critical Success Factors, Financing Structure, Equity Capital, Debt Financing, Venture Capital, Mezzanine Financing, Case Study Analysis, VITALIS Ltd., Checklist for Success.- Quote paper
- Dipl.-Kfm. (Univ.), B.A. Christian Kneer (Author), 2006, Critical Success Factors For Buy-Outs, Munich, GRIN Verlag, https://www.grin.com/document/134369
