A Vendor Induced Management Buy Out (“VIMBO”) is a means of transferring ownership of a business to the continuing management. It involves selling a controlling interest in the business to management but there is no requirement for the existing owner to necessarily sell 100% of the business or to end his involvement with the business. He may, for example, continue as a consultant to the business or he may retain a minority shareholding. For this reason, it can often be a more attractive option than a sale to an unrelated third party. It can also give significant tax advantages to the selling owner (up to 50% of gross earnings) compared with continuing to own the business and extracting income through salaries and dividends.
Glovers have recently advised on a VIMBO transaction when Paul Gilks advised the management on the acquisition of a software house with an industry leading product in the social housing sector from the retiring owners.
Please note that this information is provided for general knowledge only and therefore specific advice should be sought for individual cases.
For further information, please contact Paul Gilks at
