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The Management Buyout Slump

Posted by: Emily Thornton on August 25, 2009

Given how far companies’ valuations have sunk, you’d think we’d see a flood of managers taking control of businesses through management buyouts. But data from Dealogic reveals the opposite to be the case.

There have been 42% fewer management buyouts than there were last year at this time. The companies where management buyouts have worked out are also much smaller. Managers have bought out companies worth $476 million so far this year, vs. $2 billion during the same period of 2008.

Reader Comments


August 26, 2009 10:36 AM

How to take a risk now for a LBO or MBO, given that to pump out the funds from the banks you are asked to give your crunching real estate assets in guaranty to the banks for buying a fast depreciating company ?
On the same time banks have been pumped in huge fueling by the governements in a panic-stealing of the tax payer.
And how the same tax payer can be your customer and soon a burdened healthcare volunteer?

Kevin Dee

August 30, 2009 11:28 AM

A management buyout requires management to think like owners ... and despite lots of rhetoric, many just don't get it.

Business owners take risks every day and yes their homes, retirement savings and all are up for grabs. What is the worst that can happen? You just start over, but with a whole new set of experiences. The payback of success brings great satisfaction and the opportunity to build wealth.

Now is a GREAT time to execute on MBOs, low interest rates and low valuations ... its also a good bet that if a company can survive this recession they will thrive in a recovery.

It requires BELIEF, DRIVE ... and COURAGE. Go for it!

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