MBO numbers triple over last three years

New figures have shown that the number of management buyouts (MBOs) carried out in the last three years has more than tripled.

Research carried out by Coutts Entrepreneurs has shown that entrepreneurs are increasingly taking the MBO exit option, due to a lack of trade buyers.

Andrew Haigh, a managing partner at the entrepreneurial division of the high-end bank, said that MBOs were increasingly being seen as valid and viable options for business owners who want to cash in on their efforts.

"There's a high percentage of MBO sceptics, but by ruling out a sale to their management team, they are closing down a potentially attractive exit route, which accounts for 20 per cent of business sales," explained Haigh.

Some of the major reservations expressed about going in for an MBO included concerns about the ability to maximise the price for the business and the risk of damaging business relations with existing colleagues by entering into transaction negotiations.

Research carried out by the Corporate Finance Network, a group of advisers drawn from accountancy firms, found, however, that many businesses owners are simply dissolving their businesses when they come to retirement age, because they have not planned for any sort of sale.

Their research showed that more than 80,000 companies with at least one director aged over 60 and with revenues of less than £10 million, went from trading to being dormant or dissolved during the last 12 months.