Tuesday, December 04, 2007

Have Investors Learned Their LBO Lessons?


In tracking buyouts over the past few decades, S&P finds that dealmakers are taking on ever-higher levels of risk

Leveraged buyouts are the amazing process of using other people's money to take control of a company. You can easily parlay a modest investment into a large enterprise if you know what you're doing and the timing is right. For example, in the 1980s, financial sponsors were able to finance LBOs by contributing a modest investment of 10% to 15% and borrowing the rest.


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