Unsure of the best deal structure for your circumstances? We lay out three alternative transaction routes, and consider the structure, opportunities and challenges of each.
Contents
Our experienced experts will help you cut through some of the confusion withshortvideo presentations on employee ownership trusts, debt structured deals and management buyouts.
1 Employee ownership trusts
An employee ownership trust (EOT) enables a company to sell a controlling share of the business to its employees. The business must sell between 51% and 100% of shares to the EOT, and this will ensure the future of the company is safeguarded by its employees.
Bilal Khan discusses the workings of EOTs and what businesses need to think about with this structure.
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Monique Beaulieu also outlines the tax considerations of EOTs and the benefits they can bring.
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2 Debt structured deals
A debt structured deal is a transaction where a company agrees with a third-party lender to borrow capital. Historically this was provided by the main banks. Now, however, there's been a diversification of lenders to include specialist debt providers and private equity houses. These are often used as a method of raising capital for growth or acquisitions.
George Fieldhouse talks through how they work and when a business could consider the structure.
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3 Management buyouts
Similar to an EOT, a management buyout (MBO) is a type of transaction where the existing management team buy controlling shares in a company. These transactions often involve private equity investment alongside management for a stake in the business moving forward. It allows for a controlled exit for the existing owners, while keeping the business in the hand of those who know it best.
Bilal Khan sets out both the challenges and benefits of an MBO.
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For more insight and guidance on these or any other transaction options, contact Bilal Khan,Monique BeaulieuorGeorge Fieldhouse.
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