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Define the term Leveraged Buy-Out or LBO

Leveraged Buy-Out (LBO): It is a specific kind of acquisition in which the takeover of the controlling interest in a company is prepared by employing a noteworthy amount of borrowed capital from the banks and or capital markets. Interest and principal repayments are generally made from the cash-flows of the obtained company (goal), whereas the assets of the target usually serve as collateral for borrowed capital.

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