leveraged buyout

American  

noun

1. the purchase of a company with borrowed money, using the company's assets as collateral, and often discharging the debt and realizing a profit by liquidating the company. LBO

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leveraged buyout British  

/ ˈliːvərɪdʒd /

noun

1.  LBO.  a takeover bid in which a small company makes use of its limited assets, and those of the usually larger target company, to raise the loans required to finance the takeover

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leveraged buyout Cultural  

1. The purchase of a company mainly with borrowed money on the expectation that the purchaser can repay from the company's future profits or by selling its assets. Buyers sometimes raise the money by issuing junk bonds.

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Example Sentences

Michael Milken had helped popularize the financial instrument, with many using it as a way of funding leveraged buyouts.

From Reuters

With financing having dried up for private equity-backed leveraged buyouts, buyers will have no option but to put up a lot of equity to get deals done in the near term, the conference participants said.

From Reuters

Many of the leveraged buyouts that became bankruptcies in the wake of the 2008 financial crisis were the result of private equity firms saddling companies with debt to the hilt.

From Reuters

During his four-decade career in leveraged buyouts, Mr. Lee struck enormous takeovers, including some hugely profitable ones, and helped define the industry as a major force on Wall Street.

From New York Times

The billionaire Mr. Lee, 78, founded his namesake Boston firm in 1974, far ahead of the heyday of so-called leveraged buyouts.

From New York Times

Related Words

• hostile takeover