leveraged buyout









leveraged buyout


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. Abbreviation: LBO

noun

  1. 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 takeoverAbbreviation: LBO

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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