It is increasingly common for senior management to invest in the companies in which they operate and become the largest shareholders, a term coined in the United States that is growing all over the world.
It is interesting to note that the growth in the number of MBO in companies with a valuation of more than 100 million euros has grown by 20%while the value of the mergers and acquisitions The number of MBO's has grown by 8,4%.
By sectors, the technological fabric is the most likely to encounter MBOs due to the importance and added value that the different managers can contribute with their knowledge, facilitating access to financing for these actions.
Here are some of the most talked-about MBOs of 2018.
Two major operations in 2018
Abertis
Abertis was acquired through a takeover bid by Atlantis and ACS worth more than 14.000M€ in which the management team of Abertis collaborated to ensure that the transition was made as smoothly as possible, supporting the continuity and the project proposed by the consortium of Atlantis and ACS.
Naturgy
In 2018 Repsol sold 20% of Gas Natural Fenosa's share capital to the companies CVC and Alba for a value of 3.816M€In this transaction, while not a full acquisition, part of the incoming management team invested in the acquisition, while tying in a target ratchet for further alignment of objectives.
In addition, both Alba and its management team undertook to remain in the company for a minimum of 7 years, with a preferential call option on the shares acquired by CVC.
Although it might seem that MBOs are a tool used exclusively in large transactions, the truth is that more and more transactions of mergers and acquisitions Capitalist or industrial partners are demanding not only the retention of the management team, but also targeted investment to guarantee the continuity of the team and the pursuit of the same objectives.
More and more private equity funds are seeking to avoid abrupt departures of managers with knowledge of the sector, which is why, in the case of wanting to sell or acquire a company, regardless of its size, it is important to consider how to align long-term objectives and ensure the continuity of talent, with MBOs being an exceptional tool for achieving this, especially in sectors where market knowledge is a competitive advantage or in emerging or underdeveloped markets.