Total Posts:4|Showing Posts:1-4
Jump to topic:

Questions about LBOs

Korilla
Posts: 1
Add as Friend
Challenge to a Debate
Send a Message
11/19/2014 3:27:19 PM
Posted: 2 years ago
Hi guys!

I have been wondering for a while what effect competition has to LBOs?

As in, what does the increase in competition do to the price of LBOs and the amount of acquisitions?

Any good opinions?
twocupcakes
Posts: 2,748
Add as Friend
Challenge to a Debate
Send a Message
11/22/2014 8:33:30 AM
Posted: 2 years ago
At 11/19/2014 3:27:19 PM, Korilla wrote:
Hi guys!

I have been wondering for a while what effect competition has to LBOs?

As in, what does the increase in competition do to the price of LBOs and the amount of acquisitions?

Any good opinions?

Are you talking about acquisitions in general, or specifically leveraged buy outs.

All else equal, increased competition increases acquisitions and mergers.
debate_power
Posts: 726
Add as Friend
Challenge to a Debate
Send a Message
11/22/2014 4:04:42 PM
Posted: 2 years ago
At 11/22/2014 8:33:30 AM, twocupcakes wrote:
At 11/19/2014 3:27:19 PM, Korilla wrote:
Hi guys!

I have been wondering for a while what effect competition has to LBOs?

As in, what does the increase in competition do to the price of LBOs and the amount of acquisitions?

Any good opinions?

Are you talking about acquisitions in general, or specifically leveraged buy outs.

All else equal, increased competition increases acquisitions and mergers.

Leveraged buyouts are essentially acquisitions of companies or assets paid for with borrowed money.The idea is to manage the buyout in a strategically planned way so that you can definitely use the company or asset acquired to pay off the loan. You use someone else's capital to acquire things that will be able to regenerate the borrowed capital AND add to your own capital.

It usually follows that, as competition increases, acquisitions increase in order to keep up. It's like empire-building. The easier and safer these acquisitions can be done, the more common they will become.
You can call me Mark if you like.
debate_power
Posts: 726
Add as Friend
Challenge to a Debate
Send a Message
11/22/2014 4:07:11 PM
Posted: 2 years ago
At 11/22/2014 4:04:42 PM, debate_power wrote:
At 11/22/2014 8:33:30 AM, twocupcakes wrote:
At 11/19/2014 3:27:19 PM, Korilla wrote:
Hi guys!

I have been wondering for a while what effect competition has to LBOs?

As in, what does the increase in competition do to the price of LBOs and the amount of acquisitions?

Any good opinions?

Are you talking about acquisitions in general, or specifically leveraged buy outs.

All else equal, increased competition increases acquisitions and mergers.

Leveraged buyouts are essentially acquisitions of companies or assets paid for with borrowed money.The idea is to manage the buyout in a strategically planned way so that you can definitely use the company or asset acquired to pay off the loan. You use someone else's capital to acquire things that will be able to regenerate the borrowed capital AND add to your own capital.

It usually follows that, as competition increases, acquisitions increase in order to keep up. It's like empire-building. The easier and safer these acquisitions can be done, the more common they will become.

All the money used in the buyout does not have to be credited, but it must be significant for it to be a leveraged buyout. It's all calculated in a way to reduce risks.
You can call me Mark if you like.