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Finance Dictionary and Glossary of Investment Terms
Leveraged Buyout
Definition 1.
LBO. Takeover of a company or controlling interest in a company, using a significant amount of borrowed money, usually 70% or more of the total purchase price.
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Definition 2.
A leveraged buyout, or LBO, is the purchase of a company using a large amount of debt -- much of it short-term bank borrowing secured by the assets of the company itself. After the acquisition, the acquired company typically issues bonds to pay off a portion of the debt created by the takeover.
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