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A key challenge for regulators is that much of PE’s borrowing was arranged with loose legal terms at a time when lenders were fighting for deals, making it easier today to use financial wizardry to keep sickly businesses alive. CVC Capital Partners came up with a novel use of extra leverage during its March IPO of Douglas AG.
LeveragedBuyout (LBO) An LBO transaction is an acquisition funded using a significant amount of debt where assets from both parties are used as collateral. This includes analyzing financial statements, legal documents, management team credentials, and industry trends.
And what was interesting was the first leveragedbuyout of a public company happened when I was in graduate school. KLINSKY: In 1979, it was the first leveragedbuyout of a public company. We had sold the family business, maybe buy another family business one day through a leveragedbuyout. RITHOLTZ: Yeah.
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