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Archive for the ‘LBO’ Category

LBOs demystified

Posted by Arun Uday on September 7, 2007

Given all the publicity (both positive and negative) that PE firms are getting these days in the media, some of the industry related vocabulary seems to be coming into the fold of common parlance. One such term that seems to have successfully garnered some popular attention (in India), thanks to the likes of Tata (Corus) and Birla (Hindalco) who have been famously employing it for their acquisitions is – “Leveraged Buyout” or “LBO”. When people learn about my PE affiliations, the question I sometimes get asked is – “What is this LBO thingie?” Now, who’s to explain that what I do in my job here is strictly not the financial engineering driven LBO stuff that Wall St. PE buffs are famous for (and nor is it strictly Silicon Valley style “VC”. So, what’s it that I do? – Will save that for another day…). Nonetheless, I can’t work in a PE firm and appear to be not knowing what an LBO is. So, after stretching my imagination a little, I contrived a real estate analogy to explain the same, which has met with a fair degree of success as far as a satisfactory response to the enquirer’s query goes. And it goes thus. Read the rest of this entry »

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