Structure of operations MBO / MBI / BIMBO In general, MBOs are articulated through a special purpose vehicle created ad hoc (NEWCO), shareholders of which are usually the management team and venture capital entity. In general, the Newco receives a loan from financial institutions that goes along with the equity injected by shareholders to pay the purchase price of the shares of the company to purchase. The acquisition loan originally guaranteed with a pledge over the shares purchased since the granting of security over assets of the company to purchase would be an infringement of the rules prohibiting the granting of financial assistance by a company to acquire their own actions.Nevertheless, after a reasonable time (of around 18 months in the Spanish banking practice), the NEWCO and merging the acquired company so that the assets of the acquired company become Newco and therefore financial institutions and whether which can have direct access to these assets and use them as collateral for the acquisition debt without any problems of financial assistance. Also in this fusion is very common to surface goodwill (usually the difference between purchase price and the net book value of assets incorporated) which, in some cases is tax deductible, which is a relief well significant fiscal burden and can make a very significant percentage of the purchase price will recover in the formof tax savings amortized as goodwill.
