• We are pleased to announce that the winner of our Feedback Prize Draw for the Winter 2024-25 session and winning £150 of gift vouchers is Zhao Liang Tay. Congratulations to Zhao Liang. If you fancy winning £150 worth of gift vouchers (from a major UK store) for the Summer 2025 exam sitting for just a few minutes of your time throughout the session, please see our website at https://www.acted.co.uk/further-info.html?pat=feedback#feedback-prize for more information on how you can make sure your name is included in the draw at the end of the session.
  • Please be advised that the SP1, SP5 and SP7 X1 deadline is the 14th July and not the 17th June as first stated. Please accept out apologies for any confusion caused.

Mbo

S

SummerBub

Member
Hi,
In a management buyout, if the management look to private equity investors to fund the majority of buyout, is it still considered to be highly leveraged? (since private equity investors will get shares in the company, where does the debt come from?)

Any thoughts are appreciated.
 
The management would be borrowing to fund their part of the purchase, and private equity investors typically try to invest the minimum of their own funds, using debt finance for the majority of their investment as well.

Benefits of doing this comes from the potential equity upside with fixed debt repayments, i.e. a geared / leveraged investment.
 
Back
Top