Leveraged
Buyout
Acquisitions, or buyouts, are a part of growth for many businesses. However, many companies pass up excellent opportunities for buyouts because of the high capital costs involved. This is where we can help.
Acquisitions, mergers, and buyouts are just a part of life for many businesses looking to grow and expand. Sometimes, a company is unwilling – or unable – to sacrifice enough of their cashflow to complete a buyout, but there’s a good opportunity that they don’t want to miss. High performing businesses (the ones you’d want to acquire) are usually quite expensive, but leveraged buyout financing can make them a lot more affordable.
Consisting of a combination of debt and equity, a leveraged buyout is guaranteed by a combination of assets from both the acquiring and acquired companies – hence the term “leveraged.” With leveraged buyout financing, you don’t have to worry about cutting into operational costs, and it enables the acquiring company to take their acquisition private if they so choose.
Leveraged buyout financing can help your business achieve growth objectives without sacrificing other goals in the process.
Typical size
- $10 million - $300 million
Typical uses
- Privatization
- Shareholder buyout
- Ownership transfer
- Mergers and acquisitions
Structural characteristics
- Capital used for a leveraged buyout can vary greatly depending on the situation
- Some sample structural characteristics include:
- Fixed rate
- Floating rate
- Secured
- Unsecured
Issuer benefits
- Wide variety of capital available, both in amount and structure
- Able to provide capital in multiple currencies for international buyouts
- Responsible provider that performs due diligence on acquired business
PARTNER STORY
SALARY.COM
Acquisition costs are no match for leveraged buyout financing. See what happened when Kent Plunkett, CEO of Salary.com, wanted to buy back the company he’d once founded.
“Not everything that we planned on happening went according to plan since we bought the business back. However, Prudential has been incredibly flexible, fair, and judicious in how they’ve worked with us as a partner to restore the kind of growth that we had historically at Salary.com. It's been a very successful partnership in that way.”
Kent Plunkett, Chief Executive Officer, Salary.com
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