Re:Apollo Global is buying Rackspace for $4.3B
by e15ctr0n on Friday August 26, 2016 @03:29PM
(#12368711)
Buying a company with borrowed funds and using the company's cash flows or assets to repay the loan is known as a Leveraged Buy Out (LBO) [0]. It was very trendy in the 1980s but has recently made a comeback.
A good book to read on one of the most notorious examples of an LBO is Barbarians at the Gate [1][2] which dealt with the takeover of RJR Nabisco, a large American food and tobacco company.
For lighter fare, re-watch the 1990 movie Pretty Woman [3][4] but this time ignore the fluffy romance and focus on Richard Gere's character, Edward Lewis, as he goes about negotiating the LBO of a shipbuilding company. Edward Lewis was modeled on a real-life LBO guy, Reginald Lewis, who bought Beatrice International Foods from Beatrice Companies in 1987 in an LBO worth $985 million [5].
A good book to read on one of the most notorious examples of an LBO is Barbarians at the Gate [1][2] which dealt with the takeover of RJR Nabisco, a large American food and tobacco company.
For lighter fare, re-watch the 1990 movie Pretty Woman [3][4] but this time ignore the fluffy romance and focus on Richard Gere's character, Edward Lewis, as he goes about negotiating the LBO of a shipbuilding company. Edward Lewis was modeled on a real-life LBO guy, Reginald Lewis, who bought Beatrice International Foods from Beatrice Companies in 1987 in an LBO worth $985 million [5].
[0] https://en.wikipedia.org/wiki/Leveraged_buy_out
[1] https://en.wikipedia.org/wiki/Barbarians_at_the_Gate:_The_Fa...
[2] http://amzn.com/0061655554
[3] https://en.wikipedia.org/wiki/Pretty_Woman
[4] http://www.imdb.com/title/tt0100405/
[5] https://en.wikipedia.org/wiki/Reginald_Lewis