Employee Buyout - EBO

A restructuring strategy in which employees buy a majority stake in their own firms. This form of buyout is often done by firms looking for an alternative to a leveraged buyout. Companies being sold can be either healthy companies or ones that are in significant financial distress.

For small firms, an employee buyout will often focus on the sale of the company's entire assets, while for larger firms, the buyout may be on a subsidiary or division of the company. The official way an employee buyout occurs is through an employee stock ownership plan (ESOP). The buyout is complete when the ESOP owns 51% or more of the company's common shares.


Investment dictionary. . 2012.

Look at other dictionaries:

  • employee buyout — See buyout * * * employee buyout employee buyout ➔ buyout * * * employee buyout UK US noun [C] ► FINANCE a situation in which employees buy shares in a company or part of a company in order to gain control of it: »In last summer s employee buyout …   Financial and business terms

  • employee buyout — /ɪmˌplɔɪi: baɪaυt/ noun a purchase of a company by its employees …   Dictionary of banking and finance

  • Management And Employee Buyout - MEBO — A restructuring initiative that involves both managerial and non managerial employees buying out a firm in order to concentrate ownership into a small group from a widely dispersed group of shareholders. MEBOs are generally used to privatize a… …   Investment dictionary

  • buyout — purchase of a controlling interest (or percent of shares) of a company s stock. A leveraged buy out is effected with borrowed money. Bloomberg Financial Dictionary This is when a company s management team buys all the company s shares and thereby …   Financial and business terms

  • Buyout — Purchase of a controlling interest (or percent of shares) of a company s stock. A leveraged buy out is done with borrowed money. The New York Times Financial Glossary * * * buyout buy‧out [ˈbaɪaʊt] also buy out noun [countable] FINANCE 1. when a… …   Financial and business terms

  • Buyout — A buyout, in finance, 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 control of the target company. A buyout can take the form of …   Wikipedia

  • buyout — noun Date: 1971 1. an act or instance of buying out 2. a financial incentive offered to an employee in exchange for an early retirement or voluntary resignation …   New Collegiate Dictionary

  • employee buy-out — See buyout …   Financial and business terms

  • leveraged buyout — Method of purchasing outstanding stock of publicly held corporation by management or outside investors, with financing consisting primarily of funds borrowed from investment bankers or brokers. The initial and subsequent long term capital used… …   Black's law dictionary

  • LBO, Buyout — Leveraged buyout Un financement d acquisition par emprunt, également désignée par le sigle LBO (pour l anglais leveraged buy out) consiste à racheter une société en ayant recours à de l endettement bancaire aussi appelé effet de levier. C est l… …   Wikipédia en Français

  • Leveraged Buyout — Un financement d acquisition par emprunt, également désignée par le sigle LBO (pour l anglais leveraged buy out) consiste à racheter une société en ayant recours à de l endettement bancaire aussi appelé effet de levier. C est l entreprise… …   Wikipédia en Français

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