A buyout refers to the acquisition of a controlling interest in a company, granting the buyer authority over its operations, strategy, and governance. Buyouts can involve public or private companies and are typically executed by private equity firms, strategic investors, or management teams.

Buyouts may be financed through a combination of equity and debt, with the aim of improving the company’s value through operational, strategic, or financial restructuring. Depending on who leads the acquisition, buyouts are often categorized into types such as:

• Leveraged Buyout (LBO): A buyout primarily funded through borrowed capital, using the target’s assets and cash flows as collateral.

• Management Buyout (MBO): When a company’s existing management team acquires the business from its current owners.

• Secondary Buyout: A PE-to-PE transaction where a private equity firm sells a portfolio company to another firm.

Buyouts often aim to create value over a defined investment horizon, culminating in an exit such as a resale, recapitalization, or IPO.