LBO

Deal Terms

Leveraged Buyout. A transaction in which a company is acquired primarily with borrowed money, with the company's own cash flow used to service the debt. It is the core PE strategy and the reason the industry is called private equity.

Example

KKR's 1989 RJR Nabisco deal is the classic example of a large LBO.

Related terms

• Accretion and Dilution
• Bolt On
• Data Room

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