Buyout

In finance, a buyout is an investment transaction by which the ownership equity of a company, or a majority share of the stock of the company is acquired. The acquiror 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.

Non-finance usage

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."^[1]

See also

Look up buyout in Wiktionary, the free dictionary.

• Management buyout
• Leveraged buyout
• Employee buyout
• Stub (stock)

Notes and references

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 Corporate spin-off Equity carve-out Follow-on offering Greenshoe Reverse Initial public offering Private placement Public offering Rights issue Seasoned equity offering Secondary market offering Underwriting Mergers and acquisitions Buy side Control premium Demerger Divestment Drag-along right Management due diligence Managerial entrenchment Minority discount Pitch book Pre-emption right Proxy fight Post-merger integration Sell side Shareholder rights plan Special situation Squeeze out Staggered board of directors Stock swap Super-majority amendment Tag-along right Takeover Reverse Tender offer Leverage Debt restructuring Debtor-in-possession financing 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 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