leveraged buyout (LBO)

Related Terms
Acquisition of a firm by raising its purchase price mainly through borrowing secured by the same firm's assets. After the purchase, the loan is paid from the firm's cash flow and/or by selling off its assets (called 'asset stripping').

Use 'leveraged buyout (LBO)' in a Sentence

The leveraged buyout was the only way the purchase would take place as the firm needed to accept the risk as well as the likely benefit.
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Some companies may try and take on a leveraged buyout when they feel they have no chance of turning things around.
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My dad told me that we would be undergoing a leveraged buyout soon, which meant we would be selling it.
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