# Leveraged buy-out, LBO (also used in German, more rarely debt-financed company takeover)

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- Modified: 2023-07-25T21:01:16+00:00
- Language: en

## Definition

In general, the acquisition of a company predominantly through debt capital (a substantially debt-weighted financing of an acquisition). - In particular: - a capital management company, usually a vulture fund, - finances the purchase of an - ailing, no longer competitive - company with a high proportion of loans, - the servicing of which, i.e. the interest and repayment, is settled from the future earnings of the company taken over and now realigned on the market or - from the sale of parts of the company. - See defensive measures, acquisition financing, cannibalization, bank regulatory paradox, burn-out turnaround, cash sweep agreement, delisting, financial covenant, financial investor, fairness opinion, mergers and acquisitions, poison pill, capital management company, Macaroni Defense, Material Adverse Change Clause, Pay-in-Kind Bond, Private Equity Financing, Yield Hunting, Restructuring, Venture Capital, Risk Monitoring, Articulated, Shark Watcher, Security, Toogle Debt, Trade Sale, Submarine Effect, Warehousing Risk. - Cf. ECB Monthly Bulletin of December 2006, pp. 44 ff. (types of leverage buyout explained; overviews), Deutsche Bundesbank Monthly Bulletin of March 2007, p. 35 (overview; in note 8 also percentages), Deutsche Bundesbank Monthly Bulletin of April 2007, pp. 15 ff. (detailed, textbook presentation; many overviews), ECB Monthly Report of August 2007, pp. 99 ff (textbook presentation; conceptual definitions; overviews), ECB Monthly Report of November 2007, pp. 26 ff (decline in LBO activity and its reasons; overviews). Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

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