Leveraged buyout financing is based on corporate mergers and acquisitions. It means that when a company plans to acquire other companies for structural adjustment and asset reorganization, it uses the assets and future profitability of the acquired company as collateral. A financial management activity in which banks raise part of their funds for acquisitions. For enterprises, using advanced financing strategies such as leveraged buyouts can not only quickly raise funds, but also acquiring a company is faster and more efficient than building a new one.

Leveraged buyout financing is based on corporate mergers and acquisitions. It means that when a company plans to acquire other companies for structural adjustment and asset reorganization, it uses the assets and future profitability of the acquired company as collateral. A financial management activity in which banks raise part of their funds for acquisitions. Under normal circumstances, borrowed funds account for 70-80% of the total acquisition funds, and the rest is self-owned funds. Through the financial leverage effect, the company or part of its equity can be successfully acquired. The company's total debt ratio after reorganization through leveraged buyout is over 85, and the main component of the liabilities is bank borrowing funds. Under the current market economy conditions, enterprises are increasingly developing in the direction of intensification and large-scale production. The scale of production has become one of the important conditions for enterprises to remain invincible in fierce competition. For enterprises, using advanced financing strategies such as leveraged buyouts can not only quickly raise funds, but also acquiring a company is faster and more efficient than building a new one.