A buy-in management buy-out is a compromise between a MBO and a MBI. The existing management are largely retained, joined by some key new managers, and both take an equity interest in the company, usually with private equity funding.
- retains continuity of management (like an MBO),
- brings in new management who may be better placed to raise funding (like and MBI),
- causes some uncertainty and disruption to management (but less than an MBO would),
- may improve the quality of management (like an MBI),
- is less risky than an MBI.
This does not necessarily mean that a BIMBO will always be preferable to a MBO or a MBI. For example, if the existing management are able to raise enough funding to match other likely offers, then and MBO would be more straightforward. On the other hand, if a complete change of management is needed, then an MBI would be preferable.