MBO

MBO (from the English. Managerial BuyOut ) - redemption of a company's share by its own management . It is often used in cases where the company is in an economically weak position and the owners of the company refuse to finance it further. In most cases, an MBO is carried out at the expense of third parties: banks or private equity funds, since usually management does not have sufficient funds to buy out a share of its company.

According to the Mergers.ru project, in 2007, compared with 2006, the number of MBO transactions in Russia decreased by 30%, but the cost volume increased by more than 2 times. At the same time, the average transaction price increased from $ 17 million to $ 86 million. If in 2006 the main activity was in the services and trade sectors, then in 2007 the leading role went to the financial sector.

Summarized data of the Russian market of mergers and acquisitions in the framework of MBO (2007) ^[1] :

• 30 - quantitative assessment of transactions for the acquisition of control by management;
• $ 2,409.5 million - valuation of transactions for the acquisition of control by management;
• $ 86.0 million - average transaction price;
• 93% - certainty of the price of transactions;
• 6 transactions worth more than $ 100 million;
• 25% of the value and 23% of the quantitative market volume is occupied by transactions in the financial sector;
• 96% of the value and 70% of the quantitative market volume is occupied by transactions in the form of consolidation of control over the enterprise;
• 21% of transactions occupy 95% of the market value.