You've probably heard the phrase "leveraged buyout" tossed around before, but do you actually know what it means? Don't worry, you're not alone. Leveraged buyouts sound complicated but they're actually not as intimidating as they seem once you understand the basics. In this article, we'll walk through what a leveraged buyout is in simple terms, who's involved, and why companies or investors might go this route. Whether you're just curious what all the leveraged buyout buzz is about or you're considering being part of one yourself when selling or acquiring a business, you'll learn the key things you need to know to get up to speed on the leveraged buyout process.
What Is a Leveraged Buyout? Definition and Overview
A leveraged buyout, or LBO, is when a company is purchased with a significant amount of borrowed money.