Buyout

Investment transaction by which the ownership equity of a company is acquired

Corporate finance

Financial management

* Asset and liability management
* Business plan
* Clawback
* Corporate action
* Enterprise risk management
* Financial plan
* Investment management
* Managerial finance
* Mergers and acquisitions
* Strategic financial management
* Wealth management

Accounting

* Balance sheet analysis
* Enterprise value
* Financial
* accounting
* analysis
* analyst
* engineering
* Fundamental analysis
* Management accounting
* Structured finance
* Valuation using discounted cash flows

Investment

* Angel investor
* Asset
* Bond (finance)
* Capital appreciation
* Capital structure
* Cash conversion cycle
* Cost of capital
* Eco-investing
* Economic bubble
* Economic value added
* Equity (finance)
* Exchange traded fund
* Financial analysis
* Financial risk
* Financial system
* Growth investing
* Growth stock
* Investment performance
* Investor profile
* Market risk
* Market trend
* Option
* Over-the-counter
* Pension fund
* Return on capital
* Shares
* Speculation
* Super angel
* Sustainable finance
* Systematic risk
* Systemic risk
* Too big to fail
* Too connected to fail
* Toxic asset
* Volatility (finance)
* Watered stock

Related topics

* Factoring (finance)
* Financial analyst
* Financial asset
* Hedge
* Investor profile
* Position of trust
* Statistical finance
* Stress test (financial)
* Structured product
* Supply chain finance

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For the Breaking Bad episode, see Buyout (Breaking Bad).

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In finance, a buyout is an investment transaction by which the ownership equity, or a controlling interest of a company, or a majority share of the capital stock of the company is acquired. The acquirer thereby "buys out" the present equity holders of the target company. A buyout will often include the purchasing of the target company's outstanding debt, which is referred to as "assumed debt" by the purchaser. It is usually synonymous with "acquisition".[1]

## Non-finance usage

[edit]

The term may apply more generally to the purchase by one party of all of the rights of another party with respect to an ongoing transaction between the two. For example:

* An employer may "buy out" an employee's contract by making a single prepayment, so as to have no ongoing obligation to employ the person;
* A landlord may buy out the remainder of a tenant's lease, effectively paying them to vacate.
* A government may buy out homes in a floodplain or other area subject to hazard. The language used by FEMA, a United States agency, is "acquisition".[2]
* In Major League Baseball, a club option is an optional year at the end of the ballplayer's contract that may be guaranteed at the discretion of the team. Usually, the option comes with a "buyout" which represents a fraction of the value of the option. If at the time that the club is in a position to exercise its option and the team decides not to exercise the option, the team will usually pay the buyout and decline the option. Generally, this results in the ballplayer becoming eligible to be a free agent. Alternatively, if the contract turned one of the ballplayer's arbitration-eligible seasons into an option season, the team can decline the option with the ballplayer then entering the arbitration process instead.[3]
* In real estate, a landlord has the opportunity to buy out their tenant on a mutually agreed upon price. Most of the time, landlords use buyouts to remove rent-stabilized tenants and move in a tenant who will pay a higher rent. This type of buyout can create benefits for both parties.[4]

## See also

[edit]

Look up buyout in Wiktionary, the free dictionary.

* Buyout clause
* Employee buyout
* Leveraged buyout
* Management buyout
* Growth buyout
* Mergers and acquisitions
* Stub (stock)
* Takeover

## Notes and references

[edit]

1. ^ "What Is a Buyout, With Types and Examples". Investopedia. Retrieved 2024-12-31.
2. ^ Evan Lehmann (May 7, 2013). "RISK: N.J. town, flood-soaked and weary, tries to back away from the water". ClimateWire E&E. Retrieved May 8, 2013.
3. ^ What is a Club Option? | Glossary | MLB.com
4. ^ "The New Rules of Seeking a Buyout of a Rent-Regulated Tenant".

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Corporate finance and investment banking

Capital structure|

* Convertible debt
* Exchangeable debt
* Mezzanine debt
* Pari passu
* Preferred equity
* Second lien debt
* Senior debt
* Senior secured debt
* Shareholder loan
* Stock
* Subordinated debt
* Warrant

Transactions
(terms/conditions)|

| Equity offerings|

* At-the-market offering
* Book building
* Bookrunner
* Bought deal
* Bought out deal
* Corporate spin-off
* Direct public offering
* Equity carve-out
* Follow-on offering
* Greenshoe
* Reverse
* Initial public offering
* Pre-IPO
* Private placement
* Public offering
* Rights issue
* Seasoned equity offering
* Secondary market offering
* Underwriting

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Mergers and
acquisitions|

* Buy side
* Contingent value rights
* Control premium
* Demerger
* Divestment
* Drag-along right
* Management due diligence
* Managerial entrenchment
* Mandatory offer
* Minority discount
* Pitch book
* Pre-emption right
* Proxy fight
* Post-merger integration
* Sell side
* Shareholder rights plan
* Special-purpose entity
* Special situation
* Squeeze-out
* Staggered board of directors
* Stock swap
* Supermajority amendment
* Synergy
* Tag-along right
* Takeover
* Reverse
* Tender offer

Leverage|

* Debt restructuring
* Debtor-in-possession financing
* Dividend recapitalization
* Financial sponsor
* Leveraged buyout
* Leveraged recapitalization
* High-yield debt
* Private equity
* Project finance

Valuation|

* Accretion/dilution analysis
* Adjusted present value
* Associate company
* Business valuation
* Conglomerate discount
* Cost of capital
* Weighted average
* Discounted cash flow
* Economic value added
* Enterprise value
* Fairness opinion
* Financial modeling
* Free cash flow
* Free cash flow to equity
* Market value added
* Minority interest
* Mismarking
* Modigliani–Miller theorem
* Net present value
* Pure play
* Real options
* Residual income
* Stock valuation
* Sum-of-the-parts analysis
* Tax shield
* Terminal value
* Valuation using multiples

* List of investment banks
* Outline of finance

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