The term foreignfinanced assumption or English leveraged buyout (LBO) designates the acquisition of an enterprise under installation course of a large portion of outside capital for the payment of the purchase price. Typically the exclusive or predominant provision of security of the acquisition financing takes place via the goal company and/or their fortune articles.

Since the financing turns off exclusively to the debt retirement ability of the enterprise which can be acquired, the LBO financing is comparable with a project financing.

The expectation of the Erwerbers in the LBO is based on the Leverage effect. By the small use of own resources a high own capital funds profitability can be obtained, as long as total capital profitability is higher than the Fremdkapitalzins. A condition is that the goal enterprise gains a high free cash-flow, with which the outside capital is erased.

In this necessity to have to win free means for the investor also the risk of a LBO, both for the taken over enterprise, lies and for the taking over. The taking over must infer also with bad state of business free means from the enterprise, in order to be able to erase the commitments!

The Federal association of the equity investment companies defines the LBO as a mehrheitliche assumption by own capital funds investors. According to this definition 2004 altogether 1,966, 7 millions euro were Germany far invested (see BVK statistics in figures 2004, Buy outs 2004, S.5). This corresponds to a portion of 73% all Buy outs. Thus the LBO represents momentarily clearly the most important form of the Buy outs.

See also

• Private Equity
• Management Buy Out
• Management Buy in
• M&A
• Enterprise assumption

Articles in category "Foreignfinanced assumption"

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  Furthermore, unlike AD and CVD procedures, there is no assumption that ... 528 598 862 1597 1813 1813 HIPC-Financed 0 ForeignFinanced 375 623 1075 1203 1350 ...