DEFINITION of 'Buyout'

The purchase of a company's shares in which the acquiring party gains controlling interest of the targeted firm. Incorporating a buyout strategy is a common technique used to gain access to new markets and is one of the most common methods for inorganically growing a business.


A leveraged buyout is accomplished by borrowed money or by issuing more stock. Buyout strategies are often seen as a fast way for a company to grow because it allows the acquiring firm to align itself with other companies that have a competitive advantage in a specific area.

  1. Management Buyout - MBO

    A transaction where a company’s management team purchases the ...
  2. Takeover

    A corporate action where an acquiring company makes a bid for ...
  3. Secondary Buyout

    A type of leveraged buyout in which a financial sponsor or private ...
  4. Employee Buyout - EBO

    A restructuring strategy in which employees buy a majority stake ...
  5. Target Firm

    A company which is the subject of a merger or acquisition attempt. ...
  6. Discounts For Lack Of Marketability ...

    A method used to help calculate the value of closely held and ...
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