leveraged buyouts
Borrowed-money takeovers
Leveraged buyouts are acquisitions of companies financed primarily with borrowed money rather than the buyer's own capital.
The purchased company's assets often serve as collateral for the loans, and its future cash flow is expected to repay the debt.
Private equity firms commonly use this strategy to take public companies private: The firm executed a leveraged buyout worth $25 billion.
Critics argue that LBOs saddle healthy companies with unsustainable debt.
- takeoverAssuming command of something
- corporate raiderHostile acquisition specialist
- junk bondsLow-rated corporate securities
- debt financingRaising capital through borrowing
- recapitalizationRestructuring corporate capital composition
private equity · going private · acquisition · merger · tender offers · golden parachute · financial distress · debt · bondholders · fire sale · debt restructuring · equity · finance · corporate finance · corporate restructuring · boardroom · due diligence · shareholders
leveraged buyoutsdivestitures
Sales of owned assets
initial public offerings · IPOs · going public · spin-offs · asset sales
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