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At $31.1 billion of transaction value, RJR Nabisco was the largest leveraged buyout in history until the 2007 buyout of TXU Energy by KKR and Texas Pacific Group. [33] In 2006 and 2007, a number of leveraged buyout transactions were completed that for the first time surpassed the RJR Nabisco leveraged buyout in terms of nominal purchase price.
Such a maneuver is called a leveraged buyout when initiated by an outside party, or a leveraged recapitalization when initiated by the company itself for internal reasons. These types of recapitalization can be minor adjustments to the capital structure of the company, or can be large changes involving a change in the power structure as well.
A leveraged buyout (LBO) occurs when one company acquires another using debt as the means to complete the acquisition. LBOs allow companies to purchase other companies without tying up significant ...
The leveraged-buyout industry (also known as private equity) gained a particular notoriety during the 2012 presidential campaign. However, the history of that industry is not particularly lengthy.
A management buyout (MBO) is a form of acquisition in which a company's existing managers acquire a large part, or all, of the company, whether from a parent company or individual. Management- and/or leveraged buyouts became noted phenomena of 1980s business economics. These so-called MBOs originated in the US, spreading first to the UK and ...
The credit crunch prompted buyout firms to pursue a new group of transactions in order to deploy their massive investment funds, including Private Investment in Public Equity (PIPE) transactions, as well as purchases of debt in existing leveraged buyout transactions. Some of the most notable of these transactions completed in the depths of the ...
Michael Milken, the man credited with creating the market for high yield "junk" bonds and spurring the LBO boom of the 1980s. The beginning of the first boom period in private equity would be marked by the well-publicized success of the Gibson Greetings acquisition in 1982 and would roar ahead through 1983 and 1984 with the soaring stock market driving profitable exits for private equity ...
Why the short-term focus of private equity often presents long-term challenges for the companies they acquire.