Definitions for "Leveraged Buyout"
The acquisition of a company using borrowed funds. In many cases, the loans for a LBO are secured by the assets of the company being acquired.
Method of purchasing outstanding STOCK of a publicly held corporation by management or outside investors, with financing consisting primarily of funds borrowed from investment bankers or brokers. See also GOING PRIVATE.
The purchase of a company by a small group of investors financed largely by debt, often in the form of junk bonds. Most often the target company's assets serve as security for the loans taken out by the acquiring firm, which repays the loans out of cash flow of the acquired company. The buyout firm maintains control by converting the acquired business from a public company to a private one.