Today in this blog we will discuss LBO and why and how it is used. So, to understand what an LBO is let’s take an example and explain, let’s say that a Private Equity Firm (A firm that invests in Private Companies) Blackstone Inc. wants to buy out a Company in India which is Haldiram, they don’t have and also don’t want to buy out the company in full dry powder (Cash), so in that case what Blackstone can do is take on leverage (debt) to fund the acquisition of the company.
Great info