Buyout

A buyout is the purchase of a controlling interest in a company. This typically involves acquiring a majority of the outstanding shares, effectively transferring ownership from existing shareholders. Buyouts can be initiated by internal management (a management buyout, or MBO), external investors, or a combination of both. They often involve complex financing arrangements, significant debt, and restructuring efforts aimed at improving efficiency and profitability. The goal is to gain complete control and reshape the company's strategy and operations, often with a view to reselling it later at a higher profit or taking it private.

Buyout meaning with examples

• The struggling tech startup was the target of a potential buyout from a larger competitor, promising a much needed financial boost.
• After years of poor performance, the private equity firm proposed a management buyout to revitalize the company, cutting costs and increasing production.
• The board approved the buyout offer, paving the way for the company to be delisted from the stock exchange and transformed to better the company.
• The buyout deal involved significant debt financing, requiring aggressive cost-cutting measures to ensure the company could meet its obligations.
• Employees were anxious, but they were reassured that the buyout would not impact their work environment or negatively impact employment positions.