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Before starting this assignment I did not know the definition of Leverage Buyout until I had gone to investopedia.com. The site defines Leverage Buyout as the acquisition of another company using a significant amount of borrowed money to meet the cost of acquisition. To summarize that it is a company that uses a loan to buy a company that using it’s own company.

The best example will be the leverage buyout of Clear channel and Brian Capital. On November in the year of 2006 Bain Capital and Thomas H. Lee Partners got Clear channel which was the largest radio station before the buyout was sold for $27 billion dollars. The became messy and the firms went to court. Once the issues were solve it became the largest buyout at the time of media history. Which the company then turned into iheartradio.

Leverage buyouts have become pretty frequent for some companies to grow and expand. It is in their own way to spend less of their own money and have a higher investment in return by turning the company around.