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Has anyone done a leveraged buyout on a small or mid-sized business?

I only ask because I have heard of stories of people acquiring businesses with large amounts of assets by equipment loans. Does anyone have a lender sources or tips on that kind of strategy?

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J D
JDI

I'm also interested to know if anyone has precedence for this. In the case of an LBO, the acquirers borrow against the assets of the target company. Has anyone seen in a small business acquisition where the buyer borrows against the target company assets to buyout the existing owner?

Mar 29, 2016
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The BAF Group LLC
MD

A "'leveraged buyout" is loosely defined as any purchase that involves a large amount of debt, in order to fund the acquisition. These are normally defined as anything where 50% to 80% of the purchase price is funded through debt. There are somewhat frequent circumstances where less equity (and thus, more debt) is involved; in most cases, this is accomplished by someone or some entity that has a large and proven amount of experience in the target business and/or its industry. The more the level of debt, the more the Buyer needs to be seen as being professionally able to provide assurance that he/she has the ability to overcome the debt payments through his/her understanding and control of all aspects of the business.

Mar 29, 2016

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