What is a leveraged buyout?
CIP engages in management-led buyouts, which are the purchase of companies in cooperation with the current management.A combination of equity and debt is used for the typical transaction.The equity mostly comes from CIPs various funds and other co-investors and the debt typically comes from major banks.
A Leveraged Buyout (LBO) is a transaction whereby a company’s stock or assets are purchased with borrowed money, making the company’s new capital structure to be a high percentage of debt. An acquisition of all the selling company’s stock, usually by a newly formed corporation created for the sole purpose of the acquisition, followed immediately by a merger of the buyer’s new company with the acquired company, so that the assets of the acquired company become available to the buyer to secure debt.
