Leveraged Recapitalization

A leveraged recapitalization is a financial strategy where a company takes on significant debt to quickly return value to shareholders, often through dividends or stock buybacks. The company borrows money, using its assets or future earnings as collateral, then uses the borrowed funds to pay shareholders. This approach boosts shareholder returns but increases the company's debt levels, which can impact its long-term financial health. It's typically used by private companies or during corporate restructuring to strengthen shareholder value without selling the company outright.