Editing Leveraged buyout (section)

== Management buyouts ==
{{Main|Management buyout}}

A "management buyout" (MBO) is a form of buyout in which the incumbent management team acquires a sizeable portion of the shares of the company. Similar to an MBO is an MBI (Management Buy In) in which an external management team acquires the shares.<ref name=HarvardLaw>{{cite web |author=Harvard Law School Forum |date= |title=Private Equity & Management Buyouts |url=https://corpgov.law.harvard.edu/ |website=Harvard Law School Forum |publisher=Harvard Law School |access-date=}}</ref><ref name=Cambridge>{{cite web |author=Cambridge Private Equity Study |date= |title=The Mechanics of Management Buyouts |url=https://www.cambridge.org/core/journals/journal-of-private-equity |website=Cambridge Journal of Private Equity |publisher=Cambridge University Press |access-date=}}</ref><ref name=CorpFinIns>{{cite web |author=Corporate Finance Institute |date= |title=Management Buyouts (MBO) Explained |url=https://corporatefinanceinstitute.com/resources/knowledge/finance/management-buyout-mbo/ |website=Corporate Finance Institute |publisher=CFI |access-date=}}</ref> 

Management buyouts are usually an indication of a high degree of conviction by management in the future prospects of the business relative to the existing ownership.  Often, management is able to secure the company outside of an auction process allowing the management team to acquire the company on favorable terms. In many cases the management may still require additional equity from a financial sponsor, which may also be actively involved in securing the financing for the acquisition. Financial sponsors often find MBOs to be attractive situations as they have the opportunity to align itself with an insider who may have unique perspectives on the company and potential areas of operational improvement.<ref name=HarvardLaw /><ref name=Cambridge /><ref name=CorpFinIns />