Private acquisition firm SG Berkshire has launched an innovative new solution enabling retiring business owners to exit their companies at the right value while protecting their lifetime’s work.
Management Involved Buyout (MIBO) and Management Employee Involved Buyout (MIEBO) involves SG Berkshire purchasing a majority share of the company with the incumbent management team (and employees in the case of MIEBO) also taking a slice of the equity allowing the business owner to leave straightaway, while at the same time maintaining business momentum, preserving job security and ensuring the company legacy continues.
According to the Department for Trade and Industry’s Small Business Service, up to 100,000 businesses close each year due to “transfer failure” whereby a business owner cannot find a suitable buyer, resulting in many vendors having to delay retirement, wind down the business or undertake a less acceptable trade sale.
SG Berkshire offers a real alternative to traditional management buyouts (MBOs) which are 90% down since the financial crisis and are becoming more difficult as banks have cut back on lending. In addition private equity firms and venture capitalists tend to focus on £60m plus companies and have limited interest in long-term investment.
The London-based firm’s entrepreneurial expertise and knowledge enables it to create low risk capital structures to successfully acquire its businesses. Involving the management and staff in the business from the outset ensures that the whole team works together from day one in a spirit of collective ownership and co-prosperity.
Ged Tilley, CEO of SG Berkshire, comments: ‘With the post-war baby boom generation now of retirement age many business owners are now looking for a low risk, cost effective means of exit. Our real strength is our commercial and financial capabilities which mean we are able to deliver a high quality, flexible package which offers an immediate deal for the retiring vendor whilst rewarding the loyalty and hard work of their management team and protecting the legacy of their business.’
Adrian Jobsz, sales director of Air Parts, an SG Berkshire acquisition, comments: ‘Air Parts’ owners were looking for a way out but did not want a trade sale due to low price and wanted the legacy to remain. Through SG Berkshire the senior management was able to step up and take the reins as well as enabling the company to take advantage of external management support and direction. As a result, the management team has been invigorated by the opportunity to own part of the business and have control in the shaping of its future.’