Management and employee buyout (MEBO)

Management and employee buyout (MEBO),

Definition of Management and employee buyout (MEBO):

1. MEBOs are generally used to privatize a publicly traded company, but can also be used as an exit strategy for venture capitalists or other shareholders in an already private firm. MEBOs are often seen as a way to bring greater efficiency to a firm's production because they can provide added job security for employees – motivating them to give a stronger effort to improve company profitability.

2. A buyout that is often done for the purpose of privatizing companies that are public. It is a restructuring in which the employees and management buyout the organization so that the ownership is transferred from a large number of share holders to a small group.

3. A management and employee buyout (MEBO) is a restructuring initiative that involves both managerial and non-managerial employees buying out a firm in order to concentrate ownership into a small group from a widely dispersed group of shareholders.