Talk:Leveraged buyout

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Contents 1 Example 2 Definition 3 Discrepency 4 Criticisms

[edit] Example

Can someone give a simple example of how LBO worked? —The preceding unsigned comment was added by 24.6.208.159 (talk • contribs) 18:46, 11 January 2006 (UTC)

My simple LBO explanation works like this - use the assets to come up with the down payment, use the cash flow to pay the debt. The key is a company with lots of unencumbered assets, little or no existing debt and good, steady cash flow's.

Hmm such as Microsoft ? What is the record for the smallest relative amount of equity in a LBO ? Kristian Joensen 20:43, 24 May 2006 (UTC)

[edit] Definition

Here's one thing I'm not clear on - does a "leveraged" buyout necessarily involve encumbering the target in some way after the acquisition? Or does it cover any buyout where part of the money is raised by debt?Arthur Markham 19:19, 22 October 2006 (UTC)

[edit] Discrepency

"KKR is credited by Harvard Business School as completing what is believed to be the first leveraged buyout in business history, through the acquisition of Orkin Exterminating Company in 1964." -- According to the entry for KKR, the firm wasn't founded until 1976. 156.56.168.64 04:59, 27 February 2007 (UTC)

KKR seems to have done it's first LBO in 1977. It does appear that Orkin was the first documented LBO, done in 1964, when it was purchased by Rollins, Inc. Henry Kravis was still in school in 1964.Robiecraig 17:15, 24 April 2007 (UTC)

[edit] Criticisms

Is there really no one out there apart from me who sees a downside to this? Why no criticisms section.

Whoever edits this should say a word or two about "barbarians at the gate" which refers exactly to LBO and KKR. my english aint good enough to do that, sorry.

Should it be accused of embezzlement? why not?