"Buy-outs" is the generic term for private equity funded acquisitions of later stage businesses. Such transactions include management buy-outs, management buy-ins and institutional buy-outs.
These transactions are sometimes referred to as leveraged buy-outs, hence the term "LBO", as the financing structure of these deals usually contains a significant amount of debt.
Approximately 130 firms provide private equity for buy-outs and they normally specialise by the size of transaction financed and/or by industrial sector.
"Buy & build" is a term used to describe the purchase of a small business which is used as a platform to acquire a series of companies in the same sector. Private equity firms are particularly keen on such deals as they can generate higher returns with lower risk. Industrial sectors which are highly fragmented and could benefit from consolidation are targeted for buy & build.
