Leveraged Buyout (LBO)

Acquiring a company mostly with borrowed money.

In a leveraged buyout, an investor, often private equity, buys a company using a large amount of debt secured against the target assets and cash flows. The goal is to improve operations and sell at a profit. High leverage amplifies returns but raises bankruptcy risk.

The private equity firm took the company private in a Leveraged Buyout (LBO) funded mostly with debt.