Management buy-in (MBI) meaning

Restructuring & Insolvency weekly highlights—27 November 2025 In this issue: Key R&I law developments Insolvency litigation Restructuring Directors and insolvency The office-holder Financial institutions R&I in Scotland Daily and weekly news alerts Key dates for restructuring and insolvency professionals New content New Q&As Key R&I law developments Budget 2025—key Restructuring & Insolvency announcements On 26 November 2025, the Chancellor of the Exchequer, the Rt Hon Rachel Reeves MP, set out measures of note for restructuring and insolvency practitioners. Plans cover business rates changes, hiring extra Insolvency Service staff to combat abusive phoenixism and rogue directors, the creation of the Public Authorities Fraud Investigation and Enforcement Service, and adjustments to National Insurance Contributions. See: LNB News 26/11/2025 65. Council of the EU agrees directive harmonising insolvency law across member states Negotiators for the Council of the EU and the European Parliament have reached a provisional deal on a directive aligning...

Management’s position in a management buyout (MBO) or management buy‑in (MBI) is frequently characterised by tension and potential conflict: on one side they act as owners and participants in the target enterprise, while on the other they remain employees and officers subject to the control and employment of the primary backer (ie the private equity fund). For management, an MBO or MBI is an appealing way to obtain finance to expand an existing business and to capture the rewards of that expansion as part‑owners of the business. Nevertheless, there are meaningful risks for management, both at the initial investment phase and throughout the life of the investment. In an MBO or MBI, management stands alongside the investor as a buyer of the business. In secondary and subsequent MBOs, management additionally appears in the role of seller. For further information, see Practice Note: Buyouts...

This glossary sets out many of the expressions commonly used in the leveraged finance market. Words appearing in the definitions in bold are defined elsewhere in this glossary. For further banking terminology, please refer to the main Banking & Finance Glossary... Acquisition finance glossary—A Acceleration Acceleration is the formal action taken by the agent, on the instructions of the majority lenders, following an event of default, such as making a demand for early repayment of the loan. See Practice Note: Accelerating a loan for more information... Accordion feature/accordion facility An accordion, also called an incremental debt feature, is a mechanism in the facilities agreement that, provided specified conditions are satisfied (for example, pro forma compliance with a leverage test), permits those lenders under the facilities agreement who wish to do so to advance additional debt. The terms for that extra debt are typically captured in an increase notice. This accordion or incremental debt flexibility is different from structural adjustment, which usually requires the majority consent...

A buyout typically refers to a management team acquiring an established business, with equity funding from a private equity investor, where revenues are proven and cash flow is positive Background to buyouts Why sell? A seller may choose to dispose of a company or business for several reasons, including: strategic motives, for example a corporate group selling: a non-core business, division or company to let the remainder focus on core activities, or part of its business as a pre-emptive or defensive step against a potential hostile takeover bid raising funds to ease financial pressures elsewhere in the seller’s organisation releasing capital for other investments, particularly for individual sellers or exiting venture capital investors the retirement or death of current owners distressed circumstances where solvency is an issue (including in a liquidation) an exit by an existing private equity investor Sellers often prefer to sell the...