Leveraged buyouts: a re-examination

Most leveraged buyouts (LBO) have been successful, and the benefits of LBOs appear to outweigh the costs. Organizations that have undergone LBOs are able to reduce costs, spend cash more carefully, and realize a return on investment that is about 80% over the market return. Some jobs may be lost in the short run, but huge layoffs do not usually occur after an LBO. Many LBOs have resulted in much greater profitability and employment.