POTENTIAL MBO DEAL

Connected with the broker representing an owner that got my outreach email. Seller in his 60s looking to retire. Already promised his right-hand person the president role, but the future operator doesn't have the money or appetite to take over. Seller not interested in seller note or earnout (according to the broker).

GM = 50+%. High operating leverage suggests the presence of elevator assets, which is likely why seller is trying to retain talent with his promise.
Could be an interesting situation for management buy-out. Strategic buyers are probably turned off by the future operating arrangement. LMM PE might be interested but structuring this deal requires creativity. And now, add a self-funded searcher to the mix.


Where does a searcher fit in this MBO scenario? How to align interests with seller and future operator? What are some of the creative ways to structure this deal?

Thank you for your thoughts!



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