When existing management and outside managers decide to buy out a firm, this is referred to as a Buy-In Management Buyout (BIMBO). The buyout component is represented by existing management, while the buy-in portion is represented by outside managers.This arrangement can be beneficial for all parties involved. For the company being bought out, it ensures that there is continuity in leadership and operations. Existing management has a vested interest in ensuring that the company continues to succeed after the buyout, since their own jobs are on the line. For outside investors or managers, it provides an opportunity to invest in or manage a company with pre-existing momentum and potential.There are several factors to consider when deciding if a Buy-In Management Buyout (BIMBO) is right for your business:1- The current state of the company - Is it healthy and profitable? Or does it need some work?2- The skill sets of current management - Can they lead and grow the business?3- The goals of existing management vs new investors/managers - Do they align?4- Exit strategy - What happens when/if existing management decides to sell their shares back to new investors/managers?The benefits of a Buy-In Management Buyout (BIMBO) are numerous. For one, it can provide much needed liquidity to the selling shareholders. In addition, it can help preserve jobs and promote continuity of operations. Moreover, it can also lead to increased efficiency and competitiveness due to the infusion of new blood into the company. Finally, it can be an effective way for exiting owners to monetize their ownership stake in a company.There are some potential risks associated with Buy-In Management Buyout (BIMBO) as well. For example, there may be tension between the old guard and the new management team over strategic direction or allocation of resources. In addition, there is always risk that things will not go according To plan – that key employees will leave or that major customers will defect after new management takes over control.
