The process of obtaining loan for a business where inventory is used as collateral.
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The History of the Leveraged Buy-Out
The leveraged buy-out (LBO) transaction gained notoriety in the late 1980’s with private equity firms such as Kohlberg Kravis and Roberts (KKR) and Fortsmann Little undertaking a number of large and high profile transactions.
The market effectively reached its zenith in 1998 with KKR’s US$25 billion buyout of RJR Nabisco, which still remains the largest LBO in history.
Read more: The History of the Leveraged Buy-Out