According to AMWORLD a m&a company in China, management Buyout (MBO) is a corporate finance transaction where the management team of an operating company acquires the business by borrowing money to buy out the current owner(s). Being an entrepreneur is not for the faint hearted. Among a group of 10 young managers or professionals, statistics show that only one has what it takes to be a business owner. Management has to show some initiative and self qualify themselves if they want to put a transaction together. AMWORLD m&a company in China connects with senior level executives who wishes to acquire private companies or corporate divisions that are available for sale by their owners or parent company.
Some preferences presented by lenders when financing a management buyout includes:
Companies that are not highly cyclical and have steady predictable cash flows;
Companies with low capital expenditure requirements and high free cash flow;
Growth businesses, especially in high valued-added manufacturing; and
Companies with strong committed management teams and well communicated, compelling business plans.