What are the different types of business transactions?

Management buy-in (MBI)

The acquisition of all or part of a company by one or more persons, external to the business, who will take over the control of the company themselves following the acquisition.

Management buyout (MBO)

An alternative deal structure is a management buyout or MBO which is an acquisition of all or part of a company by the current management (and possibly other staff), either with outside financing or otherwise.

Buyin management buyout (BIMBO)

An external party, often a private individual buyer, joins forces with the management team of the business in question to form a “super team” to drive the purchase of the business from the existing owners.

Full sale

A full sale is a transaction which involves the owner selling 100% of the shares in the business.

Partial sale

A partial sale is a transaction which involves the owner selling less than 100% of the shares in the business. This sort of transaction can work well for a private buyer because funders are, in principle, keen to back a business where a new and an existing shareholder come together as one to make a new team.

An asset sale

A transaction whereby the seller retains possession of the legal entity and the buyer purchases individual assets of the company, such as equipment, fixtures, leaseholds, licenses, patents/trade marks, customers and stocks. The buyer does not assume responsibility for any liabilities from the date of the transaction.

A goodwill sale

The price paid for the business is higher than the sum of the net asset value of all of the assets purchased less the liabilities assumed in the acquisition process.

A distressed sale

The financial situation has become increasingly difficult and might have slipped into a loss making situation.

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