Here you will find answers to some of the typical corporate finance questions.
One type of sale that we are seeing now more than ever is the so called VIMBO. In this form of management buy-out, the sellers of the business essentially sell to existing management over a period of time (which could be up to 7 or 8 years or longer). The sellers will take some of the consideration up front but leave the rest to be paid over time. The company essentially self-funds the sale over this period.
Third party debt funding may or may not be a feature of a VIMBO but the buyers will usually be required to put down some of their own cash. The sellers meanwhile will retain an interest (ordinary shares and preference shares/loan note instrument) which allows them to exercise a level of control in the business in order to protect their deferred consideration.
Some of the advantages of a VIMBO for sellers are:
Not all businesses will suit this model though. In order to make a successful VIMBO there needs to be (as a minimum):
Where these circumstances align, a VIMBO can be a very convenient way for business owners to sell their business in the absence of cash rich trade purchasers knocking down their door.