Management Buyout

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Home Startup Terms Glossary Management Buyout

What is a Management Buyout?

When the management of a company decides they want to purchase the company they work for, a management buyout occurs. Managers often pool together their resources and can choose to acquire a portion of the company or the entire thing. In most cases, management opts to gain complete control and ownership and uses their knowledge to grow the company with the goal of becoming more profitable.

Management Buyout Examples:

Examples of a management buyout include:

  • Example 1. Michael Dell, the founder of Dell Computers, exercised a management buyout so that he could gain more control over the future of the company.

This article discusses things management considers when opting for a management buyout.

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