16.1. General Overview of Buyouts
A buyout is a structured financial operation that, through merger, division, or acquisition of control participation, allows the transfer of the property from the old shareholders to a new entrepreneur with economic and technical support of a financial intermediary (usually a private equity fund). In a leveraged buyout (LBO) a major part of the capital is supplied by debt securities subscribed by a pool of banks and financial intermediaries. It is possible to define leveraged acquisitions as a particular type of M&A activity that leaves the acquired firm with a debt ratio higher than before the acquisition.
LBOs have a special structure, which consists of a holding company that founds a new company responsible ...
Get Private Equity and Venture Capital in Europe now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
