A management buyout sees an existing management team acquire a controlling stake - or the entire share capital - of the company they operate. An independent valuation provides the anchor for vendor negotiation, lender debt-capacity analysis and any equity investor entering alongside management.
When is an MBO valuation required?
- Vendor / management price negotiation, removing the conflict of interest inherent in management proposing the price.
- Debt funding, where lenders require an independent valuation to size senior and mezzanine facilities.
- Equity investor entry, where a PE house or institutional investor co-funds the MBO.
- Director duty considerations for outgoing directors.
Our methodology
We blend EBITDA multiples calibrated to listed comparables and recent UK transactions, discounted cash flow modelling of the management plan, and debt-capacity analysis to inform achievable deal structure.