Financial Glossary: Management buy-in (MBI)


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Management buy-in (MBI)

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Management buy-in (MBI)

Management buy-in (MBI)

When a team of managers buys into a company from outside, taking a majority Stake, it is likely to need private Equity financing.

A MBI   happens when a group of investors outside of a company purchase a controlling block of shares and keep the existing management. It happens if the internal management lacks expertise or the funding needed to 'buy out' the company from within. It can also happen if there are succession issues - in family businesses, for example, there may be nobody available to take over the management of the company. An MBI can be slightly riskier than a MBO because the new management Will not be as familiar with the way the company works.

MBO- management buy out.

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