Reverse Leveraged Buyout


DEFINITION of 'Reverse Leveraged Buyout'

The offering of shares to the public by a company that was taken private during a leveraged buyout. In the leveraged buyout, a private equity firm would have purchased the publicly traded company by borrowing heavily (using leverage) to purchase all the company's stock and using the target's assets as collateral.

BREAKING DOWN 'Reverse Leveraged Buyout'

After the LBO, the private equity firm repackages the company while it is privately owned and can't be as heavily scrutinized by the public. It then offers the company's shares for sale again in an RLBO. A number of academic research studies covering the period from 1980 to 2000 found that shares issued in RLBOs performed well after the IPO.

  1. Leveraged Loan

    Loans extended to companies or individuals that already have ...
  2. Capital Gearing

    The degree to which a company acquires assets or to which it ...
  3. Debt

    An amount of money borrowed by one party from another. Many corporations/individuals ...
  4. Stock

    A type of security that signifies ownership in a corporation ...
  5. Leveraged Buyout - LBO

    The acquisition of another company using a significant amount ...
  6. Employee Buyout - EBO

    A restructuring strategy in which employees buy a majority stake ...
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