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Fundamental
LBO (Leveraged Buyout)
Acquisition financed primarily with debt; target's cash flows service debt
Definition
LBO involves acquiring a company using mostly debt financing. The target's cash flows service the debt, with equity providing upside. Private equity firms commonly use LBOs to acquire undervalued companies with stable cash flows.
Related Topics
#private equity
#acquisition
#debt financing
#financial engineering
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Category: Fundamental
Fundamental analysis examines a company's financial health, management quality, and market position to determine intrinsic value.
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