It is a financial operation that mainly consists on the conversion of the directors or managers of a business or company into the largest shareholders of the firm.

The MBO is a financial procedure that involves the transfer of the largest shareholder of a company to a group of people and entities, normally directors, managers or employees.

Some years ago, in order to be considered a MBO, it was necessary that directors acquired the majority of the company or, at least, its effective control. Nowadays,  the minority stocks are included as well.

It is also important to notice that there are several types of MBO: one of them is the Management Employee BuyOut (MEBO), in which both workers and managers take part. The second one is the Leveraged Management BuyOut (LMBO), which is based on indebtedness. These financial operations are the logical evolution of the figure of the Management BuyOut, since the majority of the cases are made out of debt resource. Finally, there is a distinction between private MBO, state MBO and institutional MBO too.