Research On Risk Of Leveraged Buyout Financing Structure In Enterprise

Leveraged buyout is a special merger and acquisition model that emerged in the world's fourth wave of mergers and acquisitions in the 1980s and is one of the most compelling financial innovations in the US investment industry.Through leveraged acquisitions.Enterprises use a variety of financing channels than their own large-scale acquisition of enterprises.With the gradual development of' China's capital market in recent years,as well as the gradual opening of the policy,our enterprises have begun to gradually learn and introduce the operation mode of leveraged buyout,and in recent years swept the entire domestic market.Leveraged buyout is essentially a debt acquisition,that is,the debt capital as the main financing tool,the use of financial leverage to increase the debt ratio,with less self-financing to raise the main funds for the acquisition,reorganization of a capital operation.It has a relatively rich financing structure and tools to choose from,at the same time,due to the use of a higher financial leverage,also face a larger financing structure risk.This paper begins with the discussion of the basic concepts and characteristics of leveraged buyout,expounds the theory of financing structure of previous studies,and introduces the general operation procedure and financial leverage of leveraged buyout.And on this basis,a variety of leveraged buyout of the classic financing structure as a supplement to the specific analysis,and how to determine the size of each risk point to measure the way.Finally,through the analysis of the typical cases of the acquisition of Xingke Jinpeng,the paper studies the financing structure and the specific risks brought by the financing structure,and analyzes the cases in the way of judging the risks.The financing mode of leveraged buyout reflects the essential characteristics of leverage,and there are huge risks.Enterprises should choose the financing structure and term structure according to their actual situation so as to avoid the risk of'acquisition and subsequent integration.