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This is the first of a three-case series (IMD1-0202 to IMD-1-0204). In April 2002 Venkatesh Tulluri, then Strategy Director of Rhodia''s technical fibers division, announced to his management that he wanted to engineer a spin-off and management buyout (MBO) of Kermel, a small company within Rhodia''s portfolio. Kermel was a niche player in the specialty fiber market that had not been included in the ongoing company''s asset divestment program. The case investigates the evolution of the MBO process and the hurdles Venkatesh Tulluri has to overcome to give life to his endeavour. This case is interrelated with two other cases that focus on the other actors of the deal: Argos Soditic, the private equity investor, and TCFG, the mergers and acquisitions advisor of Tulluri and Kermel''s management team. A video ''IMD-1-0202-V'' is available to accompany the case. There are two presentation files to accompany the teaching note ''Buyouts: The Power of Leverage'' (IMD-1-0202-S1) and ''The Kermel Buyout: A Management Buy-Out / Buy-In'' (IMD-1-0202-S2).