Management buyouts and shareholder exits, structured to complete
Buying the business you run, buying out a departing shareholder, or planning a succession — Caban structures the deal, funds the gap, and runs the process to completion.
The buyout funding gap — and how it is bridged
Almost every management buyout runs into the same problem: the management team knows the business intimately and can run it, but cannot personally fund the purchase price. The deal is built by layering the capital: the team's own equity contribution, senior debt secured on the business, a mezzanine or private-debt layer to bridge the middle, and often vendor finance or a deferred consideration where the seller takes part of the price over time. Structuring that stack — so it completes, and so the business can service it afterwards — is the core of the work.
The situations this covers
- Management buyout (MBO) — the existing team buys the business from its current owners.
- Management buy-in (MBI) — an external manager or team buys in and takes over.
- Shareholder buyout — buying out a departing, retiring or dissenting shareholder while the others retain control — common in family businesses regaining shares.
- Succession sale — an owner exiting over time, transferring ownership to the next generation or the management team on a planned timeline.
- BEE ownership transactions — structuring and funding broad-based black economic empowerment ownership, a South Africa-specific transaction type with its own funding instruments.
Getting the structure right
A buyout has three parties whose interests must all be met: the buyers (who need it affordable and financeable), the seller (who needs certainty and a fair price), and the business (which must survive the debt load). Push too much debt onto the business and it fails; too little and the buyers can't fund it. The advisor's job is finding the structure that satisfies all three — valuation, the debt-equity-vendor split, security, warranties, and the completion mechanics — then running it to a signed, funded close.
Why principal-led matters here
Buyouts are emotional as well as financial — often between people who have worked together for years. Caban's principals have sat on both sides of these tables as founders, directors and operators. Since 2012 the firm has executed more than 200 corporate finance transactions including buyouts, disposals and succession work, while holding every named transaction in confidence.
Questions, answered
What is a management buyout?
A management buyout (MBO) is the purchase of a business by its existing management team. Because the team rarely has the full purchase price, it is funded by layering the team's equity, senior debt, a mezzanine or private-debt layer, and often vendor finance where the seller takes part of the price over time.
How is a management buyout funded in South Africa?
Through a layered capital structure: the management team's own contribution, senior debt secured on the business, a mezzanine layer to bridge the gap, and frequently vendor finance or deferred consideration. Getting the split right — so the deal completes and the business can service it — is the core of the structuring work.
How do I buy out a business partner or shareholder?
A shareholder buyout is structured much like an MBO: value the departing shareholder's stake, agree the price and terms, and fund it through some combination of business cash, debt, mezzanine and deferred payment while the remaining shareholders retain control. Structuring and funding it correctly avoids straining the business.
Can a management buyout include BEE ownership?
Yes. Broad-based black economic empowerment ownership transactions are a common and South Africa-specific form of ownership change, with their own funding instruments and structuring considerations. Caban structures and funds BEE ownership alongside conventional buyouts.
What makes a management buyout succeed?
A structure all three parties can live with: affordable and financeable for the buyers, certain and fair for the seller, and serviceable by the business afterwards. Over-gearing the business is the most common cause of post-buyout failure — which is why the debt-equity-vendor split matters more than the headline price.