Intrapreneur to Entrepreneur – MBOs/MBIs as the Next Career Option for Austrian Executives

Management Buy-Outs (MBOs) and Management Buy-Ins (MBIs) provide executives with the opportunity to gain economic control over a company, thus transitioning from an employed manager to an entrepreneur. This career path allows them to take on entrepreneurial responsibility and directly participate in the company’s success.

This report analyzes the results of a survey conducted among 702 Austrian executives by Signium International in Q4 2024. The objective was to explore trends, challenges, and opportunities associated with MBO/MBI transactions and to evaluate the career prospects for Austrian managers. The analysis is supplemented with relevant international studies and expert insights.

High Interest in Transitioning from Employee to Entrepreneur 

A key finding of the study is the strong interest among Austrian executives in transitioning from being employed to becoming entrepreneurs. 77% of respondents stated that they had already considered buying or taking over a company. The interest is particularly high at the C-level (82% of respondents), reflecting high potential and decision-making authority among top executives. 

International studies support this trend. Deloitte and PwC reveal that MBOs and MBIs are increasingly being used as a tool for corporate succession and as an avenue to independence and personal growth. 

Main Obstacles: Limited Market Access and Lack of Financial Resources

Despite the high interest, many executives face significant challenges in executing an MBO/MBI: 

International studies, including those by the European Private Equity and Venture Capital Association (EVCA) and McKinsey, confirm these challenges and recommend the use of experienced advisors and the development of strong networks to support buyout transactions.

High Willingness for Entrepreneurship – If Financing is Secured 

85% of respondents indicated that they would be willing to acquire a company if suitable third-party financing were secured. This demonstrates the high potential for MBI/MBO as a career option, provided that financing solutions and investor access are available. 

A study by Forvis Mazars emphasizes that the success of MBI/MBOs is largely dependent on the collaboration between managers and investors, who not only provide financial resources but also offer strategic and advisory support. 

Preference for Smaller Deals and Alternative Financing Sources

67% of executives prefer companies with 100–500 employees as acquisition targets. The low interest in larger companies (13%) also explains the low number of PE-financed MBI/MBO transactions in Austria, as the requirements of international investors often do not align with the SME structure of the Austrian market.  

To better leverage the potential of SME deals, alternative financing models, such as bank financing and government subsidies, should be increasingly considered. 

Flexible Industry Preferences Increase Opportunities and Risks

38% of executives prefer industries in which they already have professional experience, while 36% are open to industries outside their field of expertise. This flexibility increases the number of potential target companies but also poses risks concerning industry-specific knowledge and management success. 

A ResearchGate study highlights that detailed industry knowledge is critical for post-buyout success. 

Attractive Acquisition Targets: Stability and Expansion Potential

Austrian executives prefer profitable companies with a stable market position and potential for geographic expansion. Corporate restructuring and turnaround situations, on the other hand, are considered less attractive, indicating a certain risk aversion.

Willingness to Co-Invest with External Financial Partners 

76% of respondents are willing to participate in private equity-financed MBI/MBOs and to co-invest within their financial capacity. This openness to partnerships demonstrates that external investors can play a crucial role in the implementation of MBI/MBO transactions. 

Forvis Mazars emphasizes that co-investments and long-term partnerships between managers and investors are key to the success of buyouts. 

Practical Insights from Panel Discussion

Mag. Robert F. Holzer, CEO of Frühwald Group 

Under the theme “Back to the Future – Strategic Challenges and Practical Experiences of My MBI,” Robert F. Holzer shared his experiences. He outlined the strategic challenges he faced in building a new corporate structure, developing the brand, and fostering innovation. He emphasized that the success of an MBI depends on standardized processes, solid cash flows, and proactive market observation. 

Holzer highlighted the importance of clearly distinguishing between a share deal and an asset deal. He stressed the need for comprehensive due diligence, covering financial, legal, and technical aspects. He also noted the necessity of establishing a clear corporate structure with 100% subsidiaries to ensure efficiency and control. Furthermore, motivating acquired employees and building a sustainable corporate culture were critical success factors. 

Reflecting on his lessons learned, Holzer emphasized the importance of networks for identifying suitable MBI targets. Additionally, he highlighted the significance of having a financially strong partner, which was essential for the success of the transaction. 

Mag. Gregor Zach, Partner at PwC Austria 

Gregor Zach discussed “Prerequisites and Success Factors for Management Buy-Outs and Buy-Ins.” He explained that manager-initiated transactions allow greater control over strategy and financing partners. The typical process involves target identification, initial contact, valuation, financing partner search, due diligence, and contract finalization. 

Zach emphasized that managers must take initiative and have realistic valuation expectations. Building a close relationship with the existing owner can significantly ease negotiations. He noted that private equity funds appreciate proactive managers who often bring bank financing and transaction structures to the table. 

However, Zach also pointed out potential risks, such as avoiding surprises during due diligence and effectively managing conflicts of interest when conducting a sale and MBO process simultaneously. 

Dr. Florian Kusznier, Partner at Wolf Theiss Rechtsanwälte 

Dr. Florian Kusznier addressed the topic “Legal Pitfalls and Key Issues in an MBO/MBI” and emphasized that detailed knowledge of the target company is crucial for a successful transaction. Legal complexities often arise due to merger control requirements and FDI (Foreign Direct Investment) reviews when co-investors are involved. 

Kusznier stressed the importance of involving a Financial Advisor, who acts as a liaison with the seller’s advisor to facilitate communication and negotiation processes. He highlighted the necessity of ensuring the bankability of the transaction, particularly when structuring Special Purpose Vehicles (SPVs) to optimize financing. 

Regarding the financing structure, Kusznier explained that banks expect market-standard due diligence and professional contract documentation. He also pointed out the strategic importance of the “Debt Push Down” approach, where acquisition credit is used to finance the target company, which requires meticulous planning to ensure financial stability and investor confidence. 

Dr. Gernot Hofer, CEO of Invest AG 

Dr. Gernot Hofer presented on the topic “From Managing Director to Shareholder – Using Private Equity for Entrepreneurship.” He illustrated how Invest AG acts as a growth driver by providing financial and strategic support to management teams. Private equity plays a crucial role in succession planning, carve-outs, and turnaround situations. 

Hofer shared a practical example of a successful MBO with Herba Chemosan Apotheker AG, which allowed the acquisition of a “non-core asset” from a U.S. corporation. Potential conflicts between the seller, management, and financing partners were addressed early on, ensuring transaction security through the involvement of experienced financial partners. This demonstrated a high level of transaction security and “fire power” during negotiations. 

He identified several success factors, including forming heterogeneous teams with complementary skills to adopt a flexible and comprehensive approach to the challenges of an MBO/MBI. Hofer emphasized that management’s personal financial commitment enhances credibility with investors and builds trust in the transaction. To ensure long-term success, clear rules regarding “good/bad leaver” scenarios are essential, as they safeguard the company’s continuity and stability post-acquisition. 

Conclusion and Recommendations

The study shows that Austrian executives have a strong interest in Management Buy-Outs (MBOs) and Management Buy-Ins (MBIs) as potential career options. However, the actual implementation of these plans is significantly hindered by a number of financial and procedural obstacles. Particularly problematic are the limited access to investors and financing opportunities, as well as a general uncertainty about the process of MBO/MBI transactions. These factors restrict the potential of these career options in Austria. Nevertheless, targeted measures are necessary to create innovative and profitable career opportunities for executives and to fully exploit the potential of MBO/MBI. 

To promote the development of MBO/MBI in Austria, it is recommended to improve access to investors and financing instruments. This could be achieved by establishing targeted networks that connect potential buyers with suitable investors and financing partners. Another important step would be to introduce training and support services for the implementation of MBO/MBI. This could be facilitated by setting up competence centers that provide comprehensive knowledge about processes, legal frameworks, and strategic approaches. 

Furthermore, promoting networks to identify suitable target companies should be a priority. Platforms that connect executives and entrepreneurs could help identify and evaluate acquisition opportunities at an early stage. Equally important would be the establishment of communication platforms to encourage dialogue between potential investors and interested executives. This would not only strengthen trust but also promote the formation of long-term partnerships. 

By implementing these targeted measures, interest in MBO/MBI in Austria can not only be stimulated but also successfully translated into practice. This would pave the way for a new era of innovative and profitable career opportunities. 

Additional insights from the panel discussion and expert interviews indicate that thorough preparation and strong networks are crucial for the success of an MBO/MBI. All speakers emphasized that the financing structure and bankability are particularly important key factors, especially when dealing with external investors and banks. Moreover, the motivation and commitment of the management team are decisive in convincing sellers and investors and ensuring the success of the buyout. 

New perspectives emerge from the idea of developing checklists and best practices for potential MBI/MBO candidates. These could provide concrete action steps and proven procedures, thus facilitating the planning and execution of such transactions. Additionally, a stronger focus on legal pitfalls and their solutions would be useful in offering practical recommendations and risk assessments. 

Overall, the findings suggest that by actively promoting networks, enhancing information and training opportunities, and integrating practical examples and best practices, the potential of MBO/MBI in Austria can be better realized. In this way, a new era of innovative and profitable career opportunities for executives can be created.