Leveraged Recap

A leveraged recapitalization, or leveraged recap, is a financial strategy where a company takes on additional debt to buy back its own shares or pay dividends to shareholders. This approach allows the company to return value to shareholders quickly, often increasing short-term profits or investor returns. However, it also increases the company's debt load and financial risk, as it must now service the debt regardless of business performance. In essence, it's a way for a company to leverage borrowed money to boost shareholder value, but it comes with higher financial commitments and potential risks.