The owner loses confidence in the future of the company and is willing to sell it to the management （ Believe in the future of the company ），In order to retain some corporate investment values, management sees values that business owners do not see and do not want to pursue. In most cases, the management team does not have sufficient funds to pay for the equity required for the acquisition （ and bank debt merger constitutes acquisition price ）, so the management team cooperates with financial sponsors to provide part of the funds for the acquisition.
Any digital entrepreneur should
For the management team, the transaction negotiation （ with the financial sponsor, that is, who obtains the latest database company’s share of shares ） is the key value creation lever. Financial sponsors usually sympathize with management acquisitions, because in these cases, they are convinced that management believes in the company’s future and is interested in value creation （ rather than just being employed by the company ）.
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There is no clear guideline on how many shares the management team must hold after the acquisition to qualify for MBO, which is different from the normal leverage BO Leads acquisition of joint investment by management and financial sponsors. However, in the usual use of the term, MBO refers to the situation where the management team initiates and actively promotes the acquisition.