Management-led Internal Buyouts (A Private Equity Perspective)

Before you are a leader, success is all about growing yourself. When you become a leader, success is all about growing others. —Jack Welch

The same can be said about growing and exiting a business. Most owners start their business in management positions, eventually growing and stepping into a more strategic role. As the company grows, new non-owning managers are added. When looking to exit, selling the company to key managers is an attractive way to monetize the value of their business, preserve its legacy, and give back to those folks who helped them succeed.

While any exit strategy has it’s lists of pros and cons, management-led buyouts preserve key human capital and knowledge, providing confidence and stability for retiring owners and other members of the organization. The buyers are usually highly motivated, and the transition can be easily planned.

However, buying a business requires significant amounts of capital, an amount that is often more than the management team can save from their salaries or risk in one investment and more than the local bank will lend.  It also requires an understanding of the financing options and complex buying process spanning four to six months of due diligence, financial analysis, negotiations, and legal agreements. But it can be done, typically with the help of private equity professionals whose line of work is focused entirely on buying businesses.

In the webinar hosted by Kyle Madden of KLH Capital, will teach you how private equity groups “sponsor” management teams to fully fund the purchase of the company and navigate the intricate process required to successfully complete the transaction.  You’ll also learn the benefits of using private equity to accomplish an internal sale versus other transaction alternatives.

During the webinar, you’ll learn:

  • Understand private equity and how private equity groups work with management teams to buyout their owners
  • Learn the basic mechanics of a management buyout (MBO) transaction and its benefits
  • Identify when an owner/company is a candidate for an MBO
  • Compare a private equity-backed MBO to alternative options such as seller financing and ESOPs
  • Understand when and how to introduce the concept to an owner

The webinar is scheduled for April 11, 2018, at 1 p.m. EST. Register Now.

About KLH Capital

KLH Capital exists as a platform to help companies and entrepreneurs reach higher levels of success and prosperity. We do this by making an equity investment in your business and partnering with you to strengthen the company’s market position and grow its value. In every partnership, management has control of day-to-day operations, meaningful equity in the business and unfettered access to us and our vast network of expert relationships accrued over our more than 30 years in business. With KLH as your partner, you also have access to the broader capital markets without personal guarantees or risk to personal assets.


About Exit Planning Institute:

EPI LogoThe Exit Planning Institute (EPI) is an education company that provides exit planning education to advisors and middle market business owners.  We view exit planning as a strategy, not an event.

EPI leads the professional services profession with the best industry content, ongoing support, and owner education platform, all of which align with our mission: Change the outcome.

Only 2 out of every 10 businesses that come to market actually sell.  We want to increase the number of saleable businesses.

Only 30% of family businesses successfully transition to the second generation, only 12% transfer to the third, and the success rates diminish from there.  We want to improve those intergenerational transitions.

Of those that succeed in the sale of their business, 75% experience “profound regret” within one year of exiting their business.  We want to understand why and create strategies that achieve profound success, wealth, and satisfaction.

EPI is an education company, powered by an elite community of top advisors and owners, all focused toward creating a valuable, transferable future for the business marketplace.

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