Review:
Leveraged Buyouts
overall review score: 3.5
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score is between 0 and 5
Leveraged buyouts (LBOs) are a financial transaction in which a company is acquired using a significant amount of borrowed money to meet the cost of acquisition. The assets of the company being acquired and often the assets of the acquiring company are used as collateral for the loans.
Key Features
- Use of significant borrowed funds
- Assets used as collateral for loans
- Increased financial leverage
Pros
- Can provide opportunity for growth and expansion of businesses
- Can lead to improved operational efficiency through restructuring
Cons
- High level of debt can pose financial risks
- Can result in job cuts and workforce reductions