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Dictionary by pitch.dog
Exits, liquidity & investor returns · Working

Leveraged buyout

Also called: LBO

ELI5

A buyer uses significant borrowed money to buy a company.

Used in conversation

“The leveraged buyout depends on stable cash generation.”

Definition

An acquisition financed substantially with debt secured by or repaid from the target business.

Here “Leveraged buyout” means: An acquisition financed substantially with debt secured by or repaid from the target business.

Pitch context

You will see “Leveraged buyout” in fundraising decks, data rooms, term sheets and investor conversations when the discussion reaches exits, liquidity & investor returns.

Why it matters: In exits, liquidity & investor returns, a loose definition can change rights, obligations, approval, disclosure or enforceability.

Caution

Meaning, enforceability and required process vary by jurisdiction and agreement; this definition is not legal advice.

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Sources & evidence · 6

Direct term-level sources and supporting source families.