Management Buyout
This case study relates to a small, owner-managed business that has several operating divisions employing circa one hundred and sixty employees supplying services to the engineering and security sectors.
The management team decided to undertake a management buyout and as part of this process was required to develop a long-term strategic plan. This was a pre-requisite to secure funding for their buyout bid. The management team has previous experience of the NOVO Strategy framework and decided that it would help them with their buyout proposal.
The MD leading the buyout decide to undertake a strategic review that would be the trigger to a successful buyout. Using the strategy framework with its helpful tools, guidance and experience enabled them to complete the project identifying and addressing key changes to their markets and technology opportunities.
A simple, pragmatic strategy process linked to their in-house experience and skills was a winning combination. It also provided them with a solid commitment to the new strategic objectives and a system for future monitoring and adjustment as the strategies were implemented.
They were successful in securing ownership of the business. Implementing the strategic plan enabled them to create a profitable future generating sufficient cashflows to repay investment loans and provide a sound financial basis for further expansion.
In summary the comments of the team were:
- We created a stable business with exciting future options
- Our financial model is flexible with discernible outcomes
- A better understanding of the longer-term consequences of our decisions
- A recognition and acceptance of the core drivers of our business
- A shared enthusiasm and commitment to achieving the objectives throughout the organisation
- Recognition of the importance of strategic thinking in all major decisions
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