A Leveraged Buyout (LBO) is the acquisition of a company, division, or business using a significant amount of borrowed money (debt) to meet the cost of the purchase. The assets of the company being acquired are often used as collateral for the loans, along with the assets of the acquiring company. The purpose of an LBO is to allow companies to make large acquisitions without having to commit a lot of their own capital.
Private Equity, Simplified