Management And Employee Buyout - MEBO

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.

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 can often be seen as bringing greater efficiency to a firm's production because it can provide added job security to employees, which motivates them to give a stronger effort to improve company profitability.