Management buyout Definition
A management buyout (MBO) occurs when a company's managers buy or acquire a large part of the company. It is a special case of such acquisition. The goal of such a buyout may be to strengthen the managers' interest in the success of the company. In most cases, the management will then take the company private. MBOs have assumed an important role in the corporate restructurings besides mergers and acquisitions. The key considerations are the fairness to shareholders, the price, the future business plan, and legal and tax issues.