Leveraged buyout
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Leveraged buyout (also known by its acronym, LBO) is a transaction in which a firm's publicly owned stock is acquired in a mostly debt-financed tender offer, resulting in a privately owned, highly leveraged firm. Often, the firm's own management initiates the LBO.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Leveraged buyout (LBO). A transaction in which a firm's publicly owned stock is acquired in a mostly debt-financed tender offer, resulting in a privately owned, highly leveraged firm. Often, the firm's own management initiates the LBO.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
