Leveraged buyout

Kevin Amess and John Gilligan

Chapter 98 in Elgar Encyclopedia of Mergers and Acquisitions, 2026, pp 252-257 from Edward Elgar Publishing

Abstract: This chapter examines Leveraged Buyouts (LBOs) as a central mechanism in private equity. It explains the structure of LBOs, including high debt usage and management equity stakes, often targeting SMEs or corporate divestitures. The chapter highlights agency theory as a key driver, exploring how LBOs improve governance, align managerial incentives and address inefficiencies. It also discusses the entrepreneurial potential and criticisms related to LBOs while outlining evolving trends in the sector.

Keywords: Leveraged Buyout; Private Equity; MBOs; MBIs; Agency theory; Market based incentives (search for similar items in EconPapers)
Date: 2026
ISBN: 9781800880856
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