Tag: LBO
Leveraged BuyOut is when an acquisition is made by using a large or even excessive portion of financial debt (leverage) to finance the acquisition. The investor can add several layers of debt such as senior debt, junior and non-secured debt as well as Mezzanine forms of financing. As the equity investor requires less capital he can increase his returns through this type of financial engineering.
Private Equity – Leveraged Buyout Model
The Private Equity Leveraged Buyout Model offers a simple template to calculate the financial returns (IRR and cash on cash multiple) of a leveraged buyout acquisition from a Private Equity investment perspective.