Читать книгу Mergers, Acquisitions, and Corporate Restructurings - Gaughan Patrick А. - Страница 12

In a leveraged buyout (LBO), a buyer uses debt to finance the acquisition of a company. The term is usually reserved, however, for acquisition of public companies where the acquired company becomes private. This is referred to as going private because all of the public equity is purchased, usually by a small group or a single buyer, and the company's shares are no longer traded in securities markets. One version of an LBO is a management buyout. In a management buyout, the buyer of a company, or a division of a company, is the manager of the entity.

Most LBOs are buyouts of small and medium-sized companies or divisions of large companies. However, what was then the largest transaction of all time, the 1989 $25.1 billion LBO of RJR Nabisco by Kohlberg Kravis & Roberts, shook the financial world. The leveraged buyout business declined after the fourth merger wave but rebounded in the fifth wave and then reached new highs in the 2000s (Figure 1.4). While LBOs were mainly a U.S. phenomenon in the 1980s, they became international in the 1990s and have remained that way since.

Figure 1.4 The Value of Worldwide Leveraged Buyouts, 1980–2014. Source: Thomson Financial Securities Data, February 19, 2015.

LBOs utilize a significant amount of debt along with an equity investment. Often this equity investment comes from investment pools created by private equity firms. These firms solicit investments from institutional investors. The monies are used to acquire equity positions in various companies. Sometimes these private equity buyers acquire entire companies, while in other instances they take equity positions in companies. The private equity business grew significantly between 2003 and 2007; however, when the global economy entered a recession in 2008 the business slowed markedly. Private equity activity declined then and buyers did fewer and smaller-sized deals. This business steadily rebounded during the years 2013–2014. We will discuss this further in Chapter 9.