xxivPREFACE
The management buyout (MBO) corporate restructuring transaction first came to prominence in the US during the early 1980s. It soon emerged in the UK and has subsequently become a global phenomenon. At its peak in 2007, the total value of MBO transactions in the UK reached about £9 billion, while in Western Europe, it was about €23 billion. Thus, MBOs are a significant transaction within the corporate restructuring landscape.
The Centre for Management Buy-out Research (CMBOR) was created in the momentous year of 1986 when the UK signed the Single European Act, and Big Bang hit the financial services sector. This was also the year in which Michael Jensen published his seminal article in the American Economic Review on the “Agency costs of free cash flow, corporate finance, and takeovers,” providing an important theoretical foundation for academic understanding of the MBO phenomenon. In that same year, Alex Ferguson became manager of Manchester United, an underperforming soccer club, later to be highly successful on the field following a leveraged buyout.
Many of the chapters in this volume were presented at a conference at Imperial College, London, to celebrate the 30th anniversary of CMBOR. Presciently, the anniversary conference was held on the very day that the UK decided to do a buyout of itself from the European Union! Publication of this volume will also be accompanied this year by a reissuing of the original study of Management buyouts by Wright and Coyne.1
In addition to the contributors to this volume, we thank all those too numerous to mention who have contributed to the work of CMBOR over the years. Special thanks, though, go to Brian Chiplin, John Coyne, and Ken Robbie, original colleagues at CMBOR, and to the long-standing current team of Rod Ball, Margaret Burdett, Karen Tune, and Dena Rapley for their unstinting efforts in making CMBOR work. Bob Willott, then of Spicer and Pegler, was key to setting up the initial sponsorship, subsequently carried on through Adam Mills and Chris Ward. Equistone Partners, and its variously named precursors, have funded CMBOR from the start, and we very warmly thank them for this unflagging support, especially Michael Cumming, Tom Lamb, Christiian Marriott, Brian Blakemore, and Phil Griesbach. Thanks also to Callum Bell and Shaun Mullin at Investec Bank for their current support for CMBOR, as well as to Zinka MacHale and xxvKimberly Romaine. Thanks to Gabby Newton for organizing the conference on which this volume is based.
Note
1 Wright, M., & Coyne, J. 1985. Management buyouts. Beckenham, UK: Croom Helm.xxvi