| Commentary

147 Large-scale and leveraged buy-outs

| Commentary

147 Large-scale and leveraged buy-outs

A characteristic of small-scale (or simple) management buy-outs is that the managers end up in control of Newco with the third-party investor having a minority interest. Where larger sums of money are involved, this position is reversed, with the managers ending up with a minority stake in the company and the outside investors having the majority stake but with an exit strategy of some sort.

In a leveraged buy-out, the debt finance is so great that a fixed charge over specific assets of the target is insufficient to secure all or even the major part

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