LBOs and Debt in Private Equity

The LBO, or leveraged buyout, is the emblematic Private Equity transaction: a fund acquires a company and finances part of the price with debt, which is repaid out of the company’s cash flows. Its success rests on three levers: earnings growth, deleveraging and the change in the multiple between purchase and exit. The analyses gathered here examine its financing, its governance and the often asymmetric relationship between the fund and the management team.

Key metrics:

• the acquisition multiple (enterprise value / EBITDA);
• leverage (net debt / EBITDA);
• the share of equity in the price;
• the cost of debt;
• lender protection (covenants).

Start with: No. 17 — The LBO Asymmetry · No. 32 — How Much Are Mid-Sized Companies Worth in 2026?