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A leveraged buyout (LBO) is one company's acquisition of another company using a significant amount of borrowed money (leverage) to meet the cost of acquisition. The assets of the company being acquired are often used as collateral for the loans, along with the assets of the acquiring company. The use of debt, which normally has a lower cost of ...
Jun 8, 2024 · A leveraged buyout (LBO) occurs when the acquisition of a company is completed almost entirely with borrowed funds. Leveraged buyouts declined in popularity after the 2008 financial crisis but ...
- Will Kenton
- 1 min
- Energy Future Holdings. In an era of so-called mega-buyouts between 2005 and 2007, the biggest of them all was the $48 billion acquisition of the largest electricity utility in Texas, then known as TXU, by a consortium led by Kohlberg Kravis Roberts & Co., Texas Pacific Group (TPG Capital), and Goldman Sachs.
- Hilton Hotel. At the height of the real estate bubble in 2007, the Blackstone Group bought Hilton in a $26 billion leveraged buyout. When the economy slumped into crisis soon after the deal was struck, it appeared it could not have picked a worse time, especially when some of its partners—Bear Stearns and Lehman Brothers—fell apart.
- Clear Channel. The nation’s largest radio station owner was acquired in 2006 by Bain Capital and Thomas H. Lee Partners for $27 billion. This figure included an $8 million repayment of debt.
- Kinder Morgan. The Houston-based pipeline operating company Kinder Morgan agreed to a buyout offer from a group of investors led by its chair and co-founder, Richard Kinder.
May 22, 2024 · A leveraged buyout is a generic term for the use of leverage to buy out a company. The buyer can be the current management, the employees, or a private equity firm. It's important to examine the ...
Feb 8, 2017 · This paper reviews and summarizes the empirical research on the sources and effects of wealth creation from going-private transactions in the US, UK, and Continental Europe. It also discusses the trends and drivers of global LBO activity and suggests future research topics.
Such recapitalizations are executed via issuing bonds to raise money and using the proceeds to buy the company's stock or to pay dividends. Such a maneuver is called a leveraged buyout when initiated by an outside party, or a leveraged recapitalization when initiated by the company itself for internal reasons.
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leveraged buyout (LBO), acquisition strategy whereby a company is purchased by another company using borrowed money such as bonds or loans.In numerous cases, leveraged buyouts (LBOs) have been used by managers to buy out shareholders to gain control over the company, and the strategy played an important role in the restructuring of corporate America in the 1980s.
