A management buy-in (MBI) or management buy-out (MBO or just buy-out) are forms of company acquisitions. Whether a management buy-in or a management buy-out is better depends on the circumstances of the specific case.
A management buy-in takes place when external managers buy a company in which they do not work themselves or do not hold a management position. In this case, they contribute their know-how and experience to the company, in order to develop it further and grow it profitably.
A management buy-out, on the other hand, takes place when the existing management of a company acquires its own company. In this case, the managers take control of the company they already manage, giving them greater autonomy and independence.
Both options have advantages and disadvantages. An MBI can help bring new expertise and a breath of fresh air to an established company, as external managers often bring new perspectives and ideas. An MBO, on the other hand, is an opportunity for existing management to improve the company's trajectory and financial situation, since the management team has an ownership stake in the company.
Ultimately, the choice between an MBI and an MBO depends on which option best contributes to the implementation of corporate planning and which option best positions the company in the long term. A thorough analysis and review (due diligence) of the economic, financial, tax, and legal aspects is essential prior to an acquisition, an MBI, or an MBO, in order to make an informed decision.