A buyout occurs when an investor or group of investors acquires a controlling interest — usually more than 50% — in a target company. Buyouts are the defining transaction type of private equity and are used to take public companies private, acquire divisions of larger corporations, or buy out founding families.
When significant debt is used to finance the acquisition, the transaction is called a leveraged buyout (LBO). Buyout funds in Australia and Southeast Asia typically target mid-market companies with stable cash flows, strong management teams, and clear paths to value creation through operational improvement or strategic repositioning.