ABSTRACT
The fast moving nature of the management buy-out market place and the different circumstances surrounding each buy-out make it difficult if not impossible to present the definitive statement on the practical aspects of management buy-outs. This chapter outlines the theoretical economic issues which surround management buy-outs. It discusses the reasons why the vendor of a company would wish to sell to management in preference to someone else. The chapter also discusses the ingredients for success; that is the trading conditions which must be satisfied for a management buy-out to be feasible. It provides in detail the principal issues involved in the negotiation of the buy-out deal and the ways in which the financial package can be put together. The chapter examines the negotiations and the possible ways of affecting the transfer of ownership. It also examines the structuring of the financing package.
