Definition: is the process of selling a company (or one of its business units) to its reigning management, which is usually conducted with the assistance of outside investors. MBOs typically occur in situations when the company (or its business unit) is threatened to be closed, or when its parent company plans to divest a subsidiary. This process is called an employee buy out, if workers of the company also participate in the purchase.
In a Sentence:
After the managers of Morning Dust gathered enough funds and found a trustworthy creditor, they’ve initiated the management buy out process.
Once the owners of U-Move’s parent firm voiced their desire to close down their subsidiary, the local managers decided to perform an MBO. They’ve put so much work into the development of their company that they couldn’t stand the thought of all of their efforts could be for nothing.
Synonyms and related words: buy-in management buyout, employee buyout, management contract, buyout, buyout payment