LBOs / MBOs
- Leveraged Buyouts (LBOs)
- An LBO is a method of acquiring a company or business using borrowed money. If the business or company that is being acquired generates fixed cash flows, the acquirer (typically, the sponsor providing equity) can purchase the business or company for relatively little cash. For this reason, the borrowed funds are considered the “lever” that multiplies the return on the purchaser's funds, which are constrained. In general, the ability to borrow large funds for this purpose relies on the stability of the cash flow the business generates. So-called buyout funds, which maximize returns by aggressively multiplying their borrowings, use LBOs as their principal acquisition method.
- Management Buyouts (MBOs)
- MBOs involve the acquisition by existing corporate management of a company's shares or operations. As the existing management team typically has a limited amount of cash available, MBOs generally require that funds be raised to acquired an operation. For this reason, an MBO may take the form of an LBO. In the event that borrowed funds alone are insufficient, the management team may offer equity to a collaborative sponsor, such as a buyout fund or partner.
In recent years, this method has been used more frequently by listed companies that are delisting and to enable the succession of owner-operated companies.
Establish new company to serve as the conduit for share acquisition.
The new company accumulates shares from existing shareholders.
|Corporate business partners||
DBJ's MBO-Related Financing Services
Financial Advisory Business(Financial Advisor)
As a financial advisor, DBJ ties together all MBO-related details
Investment and Loan business(Lending, Mezzanine, Investment)
Streamline financing, if possible use mezzanine financing with preferred shareholders.
Hoyo no Yado Himi
DBJ formulated an investment and loan scheme using project finance procedures and provided the funds necessary for Hoyo no Yado Himi to purchase the facilities it required and to ensure continuity of business.