leveraged buyout

• leveraged buy-out

leveraged buyout (plural leveraged buyouts)

1. (business) A transaction in which a business firm, or a controlling share of a firm, is purchased using money which was borrowed by pledging all or some of the firm's assets as collateral.
   • 1983, "Private Lives," Time, 20 June:

     To pay for Norton Simon, Mahoney and his fellow investors plan to employ a maneuver known as the leveraged buyout. They will borrow the necessary cash primarily from banks, using the company's assets as collateral.

   • 2007, Diana Farrell, "Private Equity Isn't Fading Away," BusinessWeek, 20 Nov. (retrieved 29 Jan. 2010):

     Leveraged buyout funds are behind the dramatic growth in high-yield debt—the preferred financing for today's corporate takeovers.

   • 2013 June 22, “Engineers of a different kind”, in The Economist, volume 407, number 8841, page 70:

     Private-equity nabobs bristle at being dubbed mere financiers. Piling debt onto companies’ balance-sheets is only a small part of what leveraged buy-outs are about, they insist. Improving the workings of the businesses they take over is just as core to their calling, if not more so. Much of their pleading is public-relations bluster.

• LBO

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