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Why is debt involved if the ownership structure is referred to as private equity?

April 26, 2017debt equity involved ownership private referred structure

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Why is debt involved if the ownership structure is referred to as private equity?

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A. Virtually every company, public or private, has a capital structure made up of equity (stock) and debt (bank loans, bonds, etc.). When a PE firm acquires a company, they arrange financing that is made up of equity they invest from their funds and loans from a variety of sources, mostly banks.