richardhutnik on 23 July 2012
Ok, I will say I can see a case of where a conglomerate, that was assembled and running poorly, would benefit from being broken up, and the different parts sold off. If a company has negative synergy with its assets, it makes sense to break them up.
However, what I wanted to ask about this this form of leverage buy-out: Investors borrow a bunch of money and buy up a company, and pledge the assets of the company they purchased as collatoral for the loan. They get their cut of doing this. At this point, the company is now saddled with a lot of debt, and has new owners. So, my question is, what makes this scenario good?
