Management Buy-In (MBI)

What is a ‘Management Buy-In – MBI’

A management buy-in (MBI) is a corporate action in which an outside manager or management team purchases an ownership stake in the first company and replaces the existing management team. This type of action can occur due to a company appearing undervalued or having a poor management team.

Explaining ‘Management Buy-In – MBI’

There are a wide range of management teams, such as hedge funds and other companies, that look for undervalued companies to purchase. If they find a company that fits with their investment criteria, they will often purchase the company and make it private to unlock the value. More often than not, they replace the management team with their own, which they feel will do a better job at running the company.

Further Reading

  • Family firm succession: the management buy‐out and buy‐in routes – [PDF]
  • Information sharing, price negotiation and management buy-outs of private family-owned firms – [PDF]
  • Entrepreneurial orientation in management buy-outs and the contribution of venture capital – [PDF]
  • Longevity and the life‐cycle of management buy‐outs – [PDF]
  • Management buy‐outs from the public sector: ownership form and incentive issues – [PDF]
  • An agency theoretic analysis of value creation through management buy-outs of family firms – [PDF]
  • Managerial and ownership succession and corporate restructuring: the case of management buy‐ins – [PDF]
  • Harvesting and the longevity of management buy-outs and buy-ins: a four-country study – [PDF]
  • The development of an organisational innovation: Management buy-outs in the UK, 1980–97 – [PDF]