A Practitioner's View of the LBO

Rice, III, Joseph L.
May 1985
FE: The Magazine for Financial Executives;May1985, Vol. 1 Issue 5, p45
Trade Publication
The article presents the views of corporate executives regarding leveraged buyouts (LBOs). The article states that the extraordinary growth of LBOs in recent years has been driven by the increasing availability of vast sums of capital. There are basically four different pools of capital available for buyouts. These are banks, insurance companies, mezzanine layer consisting of buyers of either preferred stock or subordinated debt with equity features, and common stock investors. An LBO can come about in a number of ways. A common situation in today's corporate restructuring environment is the divestiture of a subsidiary or division by a widely diversified company.


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