leveraged buyout, the takeover of a company, financed by borrowed funds. Often, the target company's assets are used as security for the loans acquired to finance the purchase. The acquiring company or group then repays the loans from the target company's profits or by selling its assets. Many leveraged buyouts have been financed through junk bonds.
The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2012, Columbia University Press. All rights reserved.
More on leveraged buyout from Fact Monster:
See more Encyclopedia articles on: Money, Banking, and Investment