Definition of ‘Management Buy In’
A management buy in or MBI happens when an outside management team purchases a business and replaces the existing management team. The purchase is normally carried out using private equity finance
A management buy in is in contrast to a management buy out (MBO) where the purchaser is the existing management team.
As the management buy in team does not know the business, a buy in is normally regarded as more risky than a buy out, and is therefore a more time consuming and expensive transaction to undertake due to the extra due diligence involved.
For further information see the Wikipedia MBI definition.
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