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How deals happen

The leveraged buyout

Private equity's signature move, explained step by step — click through to watch the deal come together.

Step 1 of 7

Meet the players

Every leveraged buyout starts with three parties: a private equity firm looking to buy, a bank willing to lend, and a target company for sale.

This is a simplified illustration of how a leveraged buyout typically works, not a description of any specific real transaction — real deals vary in structure. For real examples, read the daily issues.