What is a generic leveraged buyout?

Diagram of the basic structure of a generic leveraged buyout transaction A leveraged buyout ( LBO) is one company's acquisition of another company using a significant amount of borrowed money ( leverage) to meet the cost of acquisition.

Why should investors understand leveraged buyout (LBO)?

Now it’s important for investors to understand Leveraged Buyout (LBO) because Leveraged Buyout Model gives a better idea of the value of the firm to the financial buyer who might be going to pay/invest, so it is always good to have a strong understanding of an LBO . What is Leveraged Buyout (LBO)?

How long does a leveraged buyout last in France?

In France, an LBO spans five years on average from its legal closing to the end of debt repayment. To then exit after a leveraged buyout, several internal and external factors must be considered such as: ● The macroeconomic environment. Investment funds have different exit possibilities at the end of an LBO:

Who are the main players in a leveraged buy-out?

The main players in an LBO are: financial sponsors, investment banks, banks, institutional lenders and the target company's management team. Company directors or managers are central in a Leveraged Buy-Out. They are the ones who present the business and the merits of the target company to buyers and lenders.