What makes a good LBO?
A leveraged buyout can work very well when proven management is in place, and then remains in place as part of the acquiring group of stockholders. The trouble with the leveraged buyouts of the 1980s is that in some cases, outsiders came into the businesses, leveraged them and had to learn how to run them. In our case, the management team was already in place at Morton Metalcraft. I had worked here for a year prior to our acquiring the business and our core management team had many years of service with the company. In my view, if the right team is in place, an LBO is a very effective way of transitioning ownership and re-energizing a company toward higher levels of accomplishment than it may have ever thought it could obtain without the change. What kind of investor group did you put together in the buyout? The ownership of Morton Metalcraft is about half our own management team, of which I am the principal stockholders, and the other half split between an investment banker in Chicago
