Buy-in management buyout (BIMBO)
What is buy-in management buyout?
This is a type of corporate takeover that combines management buy-in and management buyout features. It’s when a company’s existing managers agree to buy the business with a group of outside managers. The current managers buy out the firm while the new managers buy in. This is designed to ensure a seamless transition to the new ownership.
Where have you heard about buy-in management buyout?
As well as being one of the best corporate acronyms – Bimbo this type of strategy is often used by companies that have strong day-to-day management but lack the leadership to drive growth once the present owner has left the business.
What you need to know about buy-in management buyout.
Bimbos are often funded by private equity firms, although banks tend to be more open to them than other types of buyout because they offer the best of both worlds. They like the fact that existing managers are already familiar with the business, while an outside management team coming in has the expertise to improve it.
However, Bimbos don’t always run smoothly. The main problem is that the existing managers might not always get on with the outsiders joining the team. These outsiders are usually coming into positions of power, so this may cause resentment among some team members.
Find out more about buy-in management buyout.
Read our definitions of management buy-in and management buyout to learn more about corporate M&As.