How does a private equity company buy up struggling companies by saddling them with debt?

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I somewhat understand how a company in debt may be bought out, but how could another company add debt to buy them out? Does that debt happen before or after they take over the struggling company?

In: Economics

4 Answers

Anonymous 0 Comments

Step 1, borrow a lot of money. Step 2, use that money to buy a company. Step 3, transfer the debt to the company. Step 4, ???? Step 5, profit.

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