Meaning of leveraged buyout | Babel Free

Definitions

A transaction in which a business firm, or a controlling share of a firm, is purchased using money which was borrowed by pledging all or some of the firm's assets as collateral.

Examples

“To pay for Norton Simon, Mahoney and his fellow investors plan to employ a maneuver known as the leveraged buyout. They will borrow the necessary cash primarily from banks, using the company's assets as collateral.”

“Leveraged buyout funds are behind the dramatic growth in high-yield debt—the preferred financing for today's corporate takeovers.”

“Private-equity nabobs bristle at being dubbed mere financiers. Piling debt onto companies’ balance-sheets is only a small part of what leveraged buy-outs are about, they insist. Improving the workings of the businesses they take over is just as core to their calling, if not more so. Much of their pleading is public-relations bluster.”

CEFR level