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Management Buy-In (MBI)

A management buy-in (MBI) occurs when an external management team acquires a company and takes over its operations. In contrast to a management buyout (MBO), where the existing management acquires the company, an MBI involves external executives bringing in fresh leadership. This often occurs when current management is unable to improve the company's performance, and new leadership is seen as a way to restructure and revitalize the business.

Example

A group of experienced managers from outside a struggling retail company purchases the business and takes over its operations, implementing new strategies to turn the company around.

Key points

• A process where an external management team buys and takes over a company.

• Used when new leadership is needed to improve performance.

• Involves acquiring both ownership and operational control of the company.

Quick Answers to Curious Questions

In an MBI, external managers buy and take over the company, while in an MBO, the existing management team acquires the business.

It typically occurs when current management is underperforming, and external leaders are brought in to restructure and improve the company’s performance.

The goal is to bring fresh leadership and expertise to revitalize a company and improve its performance and profitability.