BIMBO /‘buy-in management buy-out’ meaning

A BIMBO (buy‑in management buy‑out) is a corporate acquisition in which existing managers buy out the company while an external management team simultaneously “buys in” and joins the leadership, combining elements of an MBO and an MBI to change control and refresh management. It is a descriptive market term, not defined in legislation or case law, and is used consistently across England & Wales, Scotland, Northern Ireland and Ireland. Typical structure: a newco (bidco) acquires the target’s shares under a share purchase agreement, funded by private equity sponsors and senior/mezzanine lenders, often as a leveraged buy‑out. Existing and incoming managers subscribe for equity (including sweet equity) and may roll over shares or options. Documentation usually includes the SPA (with warranties, indemnities and restrictive covenants), an investment/shareholders’ agreement and management service agreements. BIMBOs are used for succession planning, carve‑outs and turnarounds. Financial assistance must be managed carefully. In the UK, public companies and their subsidiaries are restricted from giving financial assistance for the acquisition of their shares (Companies Act 2006, ss.678–683); most private companies are not. In Ireland, financial assistance is generally prohibited unless approved under the summary approval procedure (Companies Act 2014). External equity and debt funding are therefore common.