Vendor Initiated Management Buyouts or VIMBOs are a sale to the management team, ie an MBO, albeit heavily orchestrated by the owners.
The MBO is often afforded little latitude in the negotiations – almost a take it or leave it; this is fine, where a deal is attractive to both sides and this is the skill in making VIMBOs work.
VIMBOs can be great for keeping a deal confidential, for creating little or no disruption to the business and for allowing a phased handover of responsibilities from the seller(s) to the buyer(s). Most (but not all) VIMBOs have a heavy emphasis on the seller receiving a material element of their consideration (ie sale proceeds) over a period of several years, so it can be subject to the business being run sensibly – but the owners are usually the best people to judge if management (i.e. the MBO team) is capable of this. For the MBO team, this can be a way to remain independent and in the longer term, to create real wealth for themselves.
“Over the years Steve has offered us clear, constructive financial advice across a range of business issues. He puts forward creative, considered solutions. He’ll listen to the viewpoints of all the relevant stakeholders, but will firmly defend his own analysis. He is responsive, quick and a joy to work with. “ Tom Simpson, Managing Director, Simpson Carpenter