BIMBO (Buy-in management buy-out) is the combination of a management buy-out and a buy-in. (Watson D., Head A. 2007). Management Buy-Out involves acquisition of an equity stakes in an existing company by its existing management.
Management Buy-In is taking place when company is being purchased by new management (Pike R., Neale B., 2003).
In the case of BIMBO a company is acquired by existing management joined by new, key directors or managers. The main advantage of this option is that it may help to increase the quality of management as it provides new member of the team with knowledge and experience of existing management (Arnold G., 2005).
In a comparison to MBO, BIMBO allows us to maintain a continuity of management and it is less risky than MBI. BIMBO, as a combination of MBI and MBO seems to be a compromise solution but it does not stand for that it is always the best option.
- Arnold G., (2005), Corporate Financial Management. 3rd edition. Essex: Pearson Education Limited.
- Pike R., Neale B. (2003), Corporate Finance and Investment. Decision and Strategies. 4th edition. Essex: Pearson Education Limited
- Watson D., Head A. (2007), Corporate Finance. Principles & Practice. 2nd edition. Essex: Pearson Education Limited.
Author: Andrzej Tomasiewicz