Leveraged Buyout Instant

: A hybrid of debt and equity that fills the gap between senior debt and equity.

LBOs are defined by their unique capital structure and the use of the target company's own assets to facilitate the purchase. leveraged buyout

: Secured by assets and paid first; carries the lowest interest rates. : A hybrid of debt and equity that

: The "leverage" comes from using a small amount of equity—typically provided by a financial sponsor like a private equity (PE) firm—and a large amount of debt. : The "leverage" comes from using a small

The ultimate goal of an LBO is to realize high returns—often targeting an of 20% to 30%. Understanding the Leveraged Buyout Model - HBS Online

The "capital stack" in an LBO is often layered by risk and repayment priority:

: Ideal candidates are mature, stable businesses in non-cyclical industries with strong, predictable cash flows and low capital expenditure (CAPEX) requirements. Common Financing Instruments