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Management Buyout Advice

Kirk Rice

Helping you structure, fund and plan a successful management buyout

A management buyout (MBO) usually occurs when a company’s existing management team acquires all or part of the business from its current owner or shareholders. It can both serve as an exit route for an existing owner and provide continuity to the business after they’ve left.

Parent groups looking to sell a subsidiary or part of their business to an existing management team may also consider an MBO.

Careful planning is needed to establish the value of the business, how much the management team can afford, how the purchase will be funded and how ownership will be structured. The financial and tax implications also need to be considered as part of the wider transaction.

Kirk Rice helps business owners and management teams value, structure and model management buyouts with:

Business valuations
Management buyout structure and financial modelling
Funding, affordability and cash-flow planning
Vendor loans, earn-outs and deferred payments
Share and ownership structures
Tax planning
Corporate carve-outs
Working alongside lawyers

Kirk Rice’s specialists use almost three decades of experience to understand your business, its needs and your personal goals. Talk to us about your management buyout plans today: info@kirkrice.co.uk

If you have any questions, please get in touch

Founder Retirement & Succession

For some business owners, an MBO offers a way to exit or step back while leaving the business in the hands of the management team who helped build it.

It can provide continuity for the business, its employees and customers, while helping the existing management team become owners.

Vendor loan structuring allows the seller to receive part of the purchase price at a later date, reducing the amount the management team needs to fund upfront. We advise on how deferred payments fit within the wider MBO structure, considering affordability, cash flow and the tax position.
Business valuations help establish an appropriate value for the business or shares being acquired. This gives the seller and management a basis for agreeing the transaction and understanding how much funding may be required. Kirk Rice can value the business and model how that valuation affects the proposed MBO.
Succession tax planning considers the tax consequences of transferring ownership through an MBO. Our tax specialists advise on the implications of the proposed transaction, relevant reliefs where available and how the tax position interacts with the wider MBO structure.

Bridging the "Funding Gap": Up-front funding needn’t be a barrier to the right owners

An existing management team are often seen as the best hands to take over a business. They care about it, understand it intimately and have the drive to take it forward.

Even when owners agree that the management team is the right successor, the team may lack the funds to buy the business outright.

An MBO can be structured around the owners’ goals and the financial capability of the management team. However, it still requires careful planning around how the purchase is structured, funded and made affordable.

Some of the options we consider are:

Newco formation and debt structuring can provide a vehicle through which management acquires the business, potentially supported by external debt. We advise on and model the acquisition, ownership and funding structure, including its affordability and impact on cash flow.

Earn-out and milestone agreements can make part of the purchase price dependent on the business achieving agreed future targets. This can reduce the amount management needs to fund upfront. It may also help bridge a gap between the seller’s valuation and what the management team can initially afford. Kirk Rice models the financial implications and considers how these arrangements fit within the overall MBO structure.

Book a free discovery call

Use our online form to book a call.

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If you have any questions, please get in touch

Incentivising future succession and corporate carve-outs

A management buyout doesn’t always begin with an owner wanting to leave immediately. They may want key members of the management team to become owners progressively, helping align their interests with the future of the business.

If your exit is further down the line, creating incentives for key players can form part of a pre-succession plan. It can help them feel more invested ahead of a potential future role leading the company.

EMI options can provide a tax-advantaged way to incentivise selected management without requiring an immediate transfer of shares. Subject to the company and individual meeting the relevant conditions, options can be granted at an agreed exercise price, allowing participants to share in future growth. Where the EMI rules are satisfied, there may be no income tax or National Insurance on the grant and potentially favourable tax treatment on exercise and sale. We advise on eligibility, valuation, option terms, limits and reporting, working with lawyers on implementation.
Growth shares can give management participation in future growth above an existing value without necessarily transferring existing value. We advise on valuation, the appropriate share and ownership structure, financial implications and tax consequences, working with lawyers on implementation.
Alphabet shares use different classes of shares with different rights, allowing voting, dividend, ownership or other rights to vary between shareholder groups. We advise on how different share classes could support the ownership and MBO objectives, alongside their valuation and tax implications, with lawyers implementing the legal structure. Alternatively, a parent group may want to dispose of a non-core subsidiary to its existing management team.
Corporate carve-outs separate a subsidiary or part of a business from a larger parent group so it can be acquired independently by its existing management team. Kirk Rice advises on the valuation, financial and tax implications and transaction structure, working alongside legal advisers on implementation.

Our management buyout advice services

Our team of experts can provide support throughout the management buyout process.

Business Valuations

Establishing an appropriate value for the business to help owners and management understand the basis for the transaction.

Learn more on our Business valuations page.

Share and ownership structure advice

Advising on how ownership could be divided between the existing owner, management and potentially external investors.

Learn more on our “Selling your business” page.

Tax implications of successions, buyouts and restructures

Considering the tax implications of the proposed transaction and how these interact with the wider MBO structure.

Learn more about our business sale accountancy services.

MBO structure design and financial modelling

Designing and modelling the purchase, funding, cash flow, affordability, ownership and share arrangements.

Exit and succession planning

Helping existing owners consider how and when to step back and how ownership can transfer to the management team.

Learn more: Thinking of exiting or stepping back from your business?

Coordination with lawyers and other advisers

Working with other professional advisers to support a smoother transaction.

Get In Touch

Benefits of working with Kirk Rice

Early discussion to understand your objectives

Ensure you're paying the right amount of tax

Expert & experienced valuations

Expert support & guidance throughout the exit process

If you have any questions, please get in touch

Expert support throughout your management buyout

A successful management buyout needs to work for both the outgoing owners and the management team taking the business forward. The right structure will depend on what you want to achieve, the value of the business, available funding and the financial and tax implications of the transaction.

Kirk Rice brings together business valuation, tax and financial expertise to provide joined-up advice throughout the MBO process. We work alongside your lawyers and other professional advisers, helping coordinate the different elements of the transaction and keep the process moving.

Talk to us about your management buyout plans today: info@kirkrice.co.uk

Frequently asked questions

Answers to common questions about MBOs.

What is a management buyout (MBO)?

How can a management buyout be funded?

Is a business valuation important for a management buyout?

What are the tax implications of a management buyout?

Can a management buyout work if the management team cannot afford to buy the business outright?

Our Team

Meet our team of small business accountancy and tax specialists.

Richard joined Kirk Rice in 2024 having spent 15 years as a tax partner at Rice Associates. He advises clients from individual business owners to large corporate clients. Outside of work he enjoys outdoor life including running, cycling, and swimming plus spending time with his family. Richard Somerville Partner - Tax Thames Valley
Alex is a Chartered Tax Adviser and Chartered Accountant with over 15 years experience in tax. He joined Kirk Rice in 2021. Alex advises businesses ranging from small and medium sized firms to large groups and has particular experience in corporate restructures, share schemes and M&A advice. Outside of work Alex is married with 2 boys and enjoys following the fortunes of Tottenham Hotspur when time permits. Alex Taylor Partner - Corporate Tax Thames Valley

Exiting or stepping back from your business?

Learn more on our dedicated page.
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 Trustindex verifies that the original source of the review is Google. I have used Kirk Rice for nearly 20 years, for two businesses, numerous purchases of other businesses and two business sales, all our personal Tax and a tremendous amount of business and personal advice. My number one place to get advice from, and a trusted advisor.
  
 
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 Trustindex verifies that the original source of the review is Google. I would highly recommend Jane Page
We had an extensive tax return including pensions sale of property abroad rental income and earnings
Jane explained very clearly and precisely the return and how it was calculated ..
We had plenty of time to get the information and Jane was always on hand to explain the next step
Thanks
Stephen
  
 
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 Trustindex verifies that the original source of the review is Google. I have been using Kirk Rice for over 20 years for my personal tax returns. The team provide me with a clear layout of items, so I fully understand how my tax bill is calculated, with all the relevant tax allowances included. If I have any queries on the figures (which is very rare), they are always keen to explain how the figures were calculated. I highly recommend Kirk Rice’s services …. Good to know I have fully verified records being sent to the HMRC.
  
 
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 Trustindex verifies that the original source of the review is Google. I have been using Kirk Rice for over ten years, to handle both personal (Amanda Giles) and corporate tax affairs (Sarah Goodwin). I have always found them friendly and efficient, and their advice has been excellent.
  
 
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Contact Kirk Rice

Request Appointment

Management Buyout Advice

Helping you structure, fund and plan a successful management buyout

Blogs

Making Tax Digital

26/27 Tax Tips Download

If you have any questions, please get in touch

Founder Retirement & Succession

Bridging the "Funding Gap": Up-front funding needn’t be a barrier to the right owners

Book a free discovery call

If you have any questions, please get in touch

Incentivising future succession and corporate carve-outs

Our management buyout advice services

Business Valuations

Share and ownership structure advice

Tax implications of successions, buyouts and restructures

MBO structure design and financial modelling

Exit and succession planning

Coordination with lawyers and other advisers

Get In Touch

Benefits of working with Kirk Rice

Early discussion to understand your objectives

Ensure you're paying the right amount of tax

Expert & experienced valuations

Expert support & guidance throughout the exit process

If you have any questions, please get in touch

Expert support throughout your management buyout

Frequently asked questions

What is a management buyout (MBO)?

How can a management buyout be funded?

Is a business valuation important for a management buyout?

What are the tax implications of a management buyout?

Can a management buyout work if the management team cannot afford to buy the business outright?

Our Team

How can we help you? Enquire now using the form, or call us on the numbers below.

Thames Valley

South West London

North Hampshire

Central London

Exiting or stepping back from your business?

Get Investor Reporting Ready