The Acquisition of a business by way of a management Buyout (often referred to as an ‘MBO’) is one of the most commonly encountered Private equity-backed transactions.

This Practice Note aims to provide tax lawyers with some basic background information about MBOs, by answering the following questions:

1. •

   what are MBOs?

2. •

   how are MBOs typically structured?

3. •

   how are MBOs typically financed?

4. •

   what transactional steps are involved in an MBO?

5. •

   what are the options for private equity exit?

For more detailed information on the tax issues involved in an MBO, see Practice Notes:

1. •

   Tax and management buyouts—management shareholdings

2. •

   Tax and management buyouts—performance ratchets

3. •

   Tax and management buyouts—management shares: illustrative examples

4. •

   Tax and management buyouts—tax reliefs available to management

5. •

   Tax and buyouts—tax issues for the acquisition group

6. •

   Tax and buyouts—deductibility and VAT recovery of acquisition group deal costs

For non-tax specific coverage of buyouts generally, see Practice Note: Buyouts.