LBO (Leveraged Buyout)

A Leveraged Buyout (LBO) is a financial strategy where an investor or a group acquires a company using a significant amount of borrowed money, or "leverage." The idea is to use the company's own assets and cash flow to pay back the debt over time. This approach allows investors to control a larger company without needing to use much of their own capital. Once acquired, they often work to improve the company’s profitability before eventually selling it for a profit, ideally at a price much higher than their total investment.