Process
From a private conversation to a closed deal.
A good MBO feels inevitable in hindsight and careful in the moment. The work is to keep the company stable while ownership is being decided.
Confidential conversation
A private discussion with the operator, the owner, or both — separately if needed. The goal is a yes/no on plausibility, not a term sheet. Nothing is shared with the company, employees, or customers.
Readiness
Who is on the buying team. Whether the owner will consider an inside sale. Quality of financials. Customer concentration. Real estate. How dependent the company still is on the seller. This is where many ideas should stop, and that is useful.
Valuation range and structure
A range the business can support, not a wish. Then a structure: cash at close, seller note, rollover if the owner wants to stay in, equity for management, and outside capital if required. Structure is how operators buy companies they cannot pay for in cash.
Indication of interest
A written, calm proposal to the owner. Price range, capital sources, management equity, timeline, and what happens to employees. This is an invitation to negotiate, not a threat to quit.
Exclusivity, diligence, documents
If the owner wants to proceed, the work becomes conventional: quality of earnings, legal diligence, financing commitments, purchase agreement, employment and equity documents. Insiders still need independent advice. Familiarity is not diligence.
Close and transition
Ownership changes. Customers should feel continuity. The former owner’s role — if any — is written down. The operators start being owners, which means the balance sheet is now their problem and their opportunity.
Timeline: four to nine months is common when books are clean and the owner is decided. Faster is possible. Rushing past readiness is how deals die in diligence or after close.