Management Buyout Financing
Capital provided to facilitate the takeover of all or part of a business entity by a team of managers.
A private equity firm will often provide financing to enable current operating management to acquire or to buy at least 50 per cent of the business they manage. In return, the private equity firm usually receives a stake in the business. This is one of the least risky types of private equity investment because the company is already established and the managers running it know the business – and the market it operates in – extremely well.« Back to Glossary Index