Reorientation to this point. For other usages, please see “LBO (Disambiguous )”. This article needs to be updated. Please help update this article to reflect recent events or newly provided information. （July 2020 ） Basic Structure Map of General Lever Acquisition Transaction Leverage Acquisition （LBO） is a company that uses a large amount of borrowing （ leverage ） to acquire another company to meet Acquisition cost.
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The acquired company’s assets are usually used as collateral special data for loans along with the acquired company’s assets. The capital cost of debt is usually lower than equity, and the use of debt helps reduce the overall cost of acquisition financing. Debt costs are low because interest payments usually reduce corporate income tax liabilities, while dividend payments are usually not. The reduction in financing costs allows equity to obtain greater benefits, so debt becomes a lever to increase equity returns.
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[1] When a financial sponsor acquires a company, it usually uses the term “ leverage to acquire ”. However, part of the funds traded by many companies comes from bank debt, so it actually represents leveraged acquisitions. Leverage B2B Phone List acquisitions can take many different forms, such as management acquisitions （MBO）, management acquisitions （MBI）, secondary acquisitions and tertiary acquisitions, etc., and can be in growth, reorganization and bankruptcy. Occurred.