Management Buyouts (MBO) are often triggered when the founder of a business wants to retire, and the company’s managers acquire all or a large part of the company’s shareholding from the current owner. However, MBOs also occur when a parent company wants to dispose of part of its business. MBOs typically require financial resources beyond those of management, such as a bank debt or bonds.

A Management Buy-In (MBI) is a corporate action where an outside manager or management team purchases a controlling ownership stake in an outside company and replaces its existing management team. This type of action can occur when a company appears to be undervalued, poorly managed, or requires succession.