Leveraged Buyout (LBO)

Looking to acquire a business while maximising returns? A leveraged buyout (LBO) is a powerful acquisition strategy that uses a significant proportion of debt to fund the purchase of a company—enhancing returns, preserving capital, and optimising the capital structure.

For private equity firms and strategic acquirers, LBOs are a proven way to acquire established businesses, drive operational efficiency, and unlock long-term value through financial structuring and strategic leadership. However, executing an LBO is complex. It requires careful deal structuring, debt optimisation, and stakeholder alignment to ensure the transaction delivers returns without compromising the stability of the acquired business.

Balancing Risk and Reward

LBO financing involves managing high leverage, interest payments, and lender covenants while ensuring the business retains the flexibility to grow. Overestimating cash flows or underestimating risk can threaten both operations and investor returns.

Equally important is aligning all stakeholders—from management and equity sponsors to lenders—on a shared post-acquisition vision. Transparent governance and strong execution discipline are essential to realise the full potential of an LBO. 

 

You might consider an LBO if:

  • You’re a private equity firm targeting a stable, cash-generating business
  • You have a clear strategy for operational improvement and value creation
  • You can secure debt on terms that align with your financial model
  • You have an experienced management team ready to deliver the post-deal strategy
  • You understand and are prepared to manage the risks of high leverage

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Understanding the Use of Funds

In an LBO, a company is acquired primarily with debt, with the acquired company's assets and cash flows used as collateral. This reduces the upfront equity required while aiming to amplify returns. A typical LBO structure blends senior debt, mezzanine financing, and equity. The acquired business’s cash flow is used to repay debt over time, while operational improvements drive additional upside. Private equity firms typically pursue LBOs of businesses with stable cash flows, defensible market positions, and strong management teams—where there's a clear path to performance improvement and value creation. 

Why Work With Fuse Capital? 

Structuring and financing a leveraged buyout involves navigating layered negotiations, risk mitigation, and multiple moving parts. Getting the balance right between debt levels, cost, and covenant flexibility is essential to preserve both upside and resilience. Lender preferences vary widely by sector, deal size, and market conditions—making access to the right funding partners critical.

Fuse Capital advises mid-market, sponsor-backed businesses on tailored LBO strategies. With a global lender network across the UK, Europe, and APAC, we source the right capital partners, craft compelling financial models, and negotiate terms that support long-term value creation. 

Why Choose Us?

As your trusted debt advisory partner, we provide the expertise and support you need to navigate the complexities of funding. Here's what sets us apart:

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Focused Exclusively on Debt

Our exclusive focus on debt advisory means we bring deep expertise to help VC, PE, and PLC-backed businesses secure the right capital efficiently.

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True Partnership, Not Just Introductions

We work closely with you to understand your business, develop the right funding strategy, negotiate terms, and support you through every stage of the process.

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Built on Real-World Experience

Having built and scaled businesses ourselves, our advice is rooted in practical experience and a deep understanding of the challenges you face.

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Results That Speak for Themselves

Trusted by over 550+ businesses across the UK, Europe and APAC, we deliver strategic insight and tailored funding solutions that drive sustainable, long-term growth.

FUNDING CONNECTIONS THAT DRIVE GROWTH

Our Portfolio Experience

Our extensive network of lenders spans across the UK, EU, and beyond, ensuring we connect you with the right funding partner for your needs. From venture debt providers to asset managers, we have the relationships to deliver results.

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What Happens Next?

At Fuse Capital, we’ve been supporting SMEs with strategic debt solutions since 2013. Once we receive your details, here’s what happens next:

  1. 1

    Initial Consultation:

    We’ll arrange a call to understand your business model, funding requirements, and growth ambitions. This helps us evaluate whether there’s a strong strategic fit.

  2. 2

    Information Gathering & Review:

    If we proceed, our team will work closely with you to gather key financial and operational information. We’ll conduct a detailed review to ensure we have a clear and accurate picture of your business.

  3. 3

    Internal Review by Investment Committee 

    Your opportunity is then assessed by our investment committee. We take a considered, selective approach progressing only where we believe we can deliver real value. If there’s alignment, we’ll recommend the most effective funding strategy tailored to your needs.