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Search the term "leveraged buyout." What is a leveraged buyout (LBO)? Why is the word "leveraged"...

Search the term "leveraged buyout." What is a leveraged buyout (LBO)? Why is the word "leveraged" included in the title of this acquisition method?

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Leveraged buyout is the investment technique mainly used in the Private Equity Universe. LBO refers to buying a controlling stake in the portfolio companies buy a financial sponsor using borrowed money. For example if a private equity firm like Blackstone buys a controlling stake in a public company using debt. It is called leveraged buyout

The term leverage means the use of borrowed funds in buying.

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