Structuring Leveraged Buyouts: Debt and Equity Combinations, Valuation, Conflicts of Interest in Management Buyouts

A live 90-minute premium CLE webinar with interactive Q&A

Thursday, February 28, 2019

1:00pm-2:30pm EST, 10:00am-11:30am PST

Early Registration Discount Deadline, Friday, February 1, 2019

or call 1-800-926-7926

This CLE webinar will examine the structuring alternatives (or combinations thereof) currently employed in leveraged buyout (LBO) transactions, and the pros and cons of each. The panel will also discuss issues which can arise in a management buyout (MBO) scenario due to inherent conflicts of interest, and how to address those in the course of the transaction.


LBO transactions remain a big part of M&A and raise a host of issues because companies can wind up overburdened with debt after completion of an acquisition. The way a deal is structured can have a substantial impact on the future success or failure of the acquired company.

LBOs can be structured in a variety of ways. A third-party buyer may acquire the target directly or through the use of a special purpose vehicle (SPV). Management may bid jointly with a financial investor such as a private equity fund to buy out the other investors. The property ownership and operational activities of the target might be separated into two entities, with some financing being in the form of secured debt on property assets.

The capital structure resulting from the LBO transaction can include various forms of debt--senior, second lien, mezzanine and high-yield debt--as well as ordinary and preferred equity shares. Deal counsel should understand the competing interests of each type of investor, and the debt service and other obligations associated with each type of debt or equity for the acquired company.

Conflicts of interest arise in management buyouts (MBOs) because the managers have an incentive (and possess superior information) to pay the lowest price to selling shareholders. Courts and regulators try to protect shareholders in non-arm's-length acquisitions with third-party fairness opinions, the formation of special committees of non-interested directors, and by requiring a majority approval by minority shareholders.

Listen as our authoritative panel examines the structuring of LBOs, both with regard to the parties involved and the capital structure. The panel will also discuss issues particular to MBOs, and the steps parties take to protect the selling shareholders.



  1. LBO transactions: upfront considerations
  2. Acquiring entity structures: SPVs, JVs, other
  3. Capital structure
    1. Debt: senior, junior, mezzanine, high yield bonds
    2. Equity: ordinary and preferred
  4. Secured financing
  5. Issues particular to MBOs


The panel will review these and other issues:

  • What amount of leverage is appropriate in a given M&A transaction and who makes that determination?
  • When should an acquisition be structured through an SPV?
  • How might the capital structure affect the future performance of the acquired company?
  • What are the legal ramifications of secured vs. unsecured debt and senior vs. mezzanine?
  • What actions should management take to alleviate conflict of interest concerns in an MBO?


Rosener, James
James D. Rosener

Pepper Hamilton

Mr. Rosener is a partner in the Commercial Department of Pepper Hamilton LLP. He heads the firm's International...  |  Read More

Stark, Lisa
Lisa R. Stark

K&L Gates

Ms. Stark has nearly 15 years of corporate experience in mergers and acquisitions, strategic investments, initial...  |  Read More

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