MBO
Noun
Meaning
MBO (uncountable)
(business) Initialism of management by objective.
Synonyms
Examples
After VMBO, a pupil can continue training at the MBO ("middle-level applied education").
Management buyouts main A special case of a leveraged acquisition is a management buyout (MBO).
LBOs can have many different forms such as management buyout (MBO), management buy-in (MBI), secondary buyout and tertiary buyout, among others, and can occur in growth situations, restructuring situations, and insolvencies.
However, in the usual use of the term, an MBO is a situation in which the management team initiates and actively pushes the acquisition.
In an MBO, the incumbent management team (that usually has no or close to no shares in the company) acquires a sizeable portion of the shares of the company.
MBO situations lead management teams often into a dilemma as they face a conflict of interest, being interested in a low purchase price personally while at the same time being employed by the owners who obviously have an interest in a high purchase price.