LBO history

Leveraged buyouts (LBOs) and their effect on the economy (following their history that started in 1919 with the first LBO of Ford Motor Company) cannot be adequately discussed without taking into consideration the junk bonds.

The modern private equity business is not so old, as the first leveraged buyout took place in 1955.

In 1988, Safeway had been suffering from financial difficulties, for a few years when KKR made an approach.

Beginning in 1989, the number of defaults and bankruptcies of companies that had gone through LBOs increased sharply.

The acquisition was later chronicled and popularized by award-winning journalists Bryan Burrough and John Helyar in their book Barbarians at the Gate: The Fall of RJR Nabisco (1990), which introduced many people to the world of hostile takeovers and financial speculations in corporate America.

New York: Foundation Press, 2000.

Dolbeck, Andrew. “The Return of the Leveraged Buyout Deal.” Weekly Corporate Growth Report, 23 August 2004, 1–3.

HCA Healthcare (2006): $33 billion

In July 2007, problems in the mortgage markets began to impact the leveraged finance and high-yield debt markets.

In 2014, after many attempted restructurings, the firm filed for Chapter 11 bankruptcy.

Blackstone finally cashed in in 2018, making several billion dollars on the deal that everyone had assumed was a bust.

M&C Partners Srl © 2019.

In 2021, the company still exists and have annual revenues in excess of $35 billion.