Leveraged Buyout (LBO)
Also called LBO
An LBO is a method of valuing a company for a banker and a method of purchasing a company for a private equity firm.
Why Leveraged Buyout (LBO) matters in investment banking interviews
The LBO is the centerpiece of private equity interviews and increasingly common in banking ones. Know the three levers that drive returns — debt paydown, EBITDA growth, and multiple expansion — because "how does a sponsor make money?" is the question underneath most LBO discussions.