PE Glossary
LBO (Leveraged Buyout)
LBO · An acquisition financed with a significant proportion of debt, using the target company's cash flows and assets to service the borrowings. LBOs amplify returns but also increase risk.
Example
A PE firm acquires a €600M target with €200M of equity and €400M of debt secured against the target's cash flows (a 33% equity, 67% debt structure). The leverage amplifies equity returns when the company performs but increases risk if cash flows decline.
Put LBO in context
Browse 1,000+ European GP profiles with fund histories, portfolio companies, and verified exits.
Browse GPsGlossary last reviewed