Management Buy – in

Management Buy – In – Management Buy-In or MBI is a process of acquisition by which a group of third party managers or management with the backing of necessary financial assistance buy a company (usually a small family run business who wish to sell off their firm or even a subsidiary or sister concern of a large organization wishing to sell off ) and become its new management.

This Buy -In team generally competes with competition businesses for this acquisition to have the most suitable deal. This team is usually led by a manager who has sufficient experience in the senior management role or has led a company to the level of managing director already.

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The difference between “Buy-In” and “Buy-Out” is that in case of the former the management team is an outsider and comes from another source, whereas in the case of latter, the management is already working for the company in question. This type of a corporate action occurs owing to the poor financial condition of the company or if the company has a weak management team.

Edited and Updated 08th March 2014

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