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leveraged recapitalization

   Also found in: Wikipedia 0.02 sec.
Leveraged recapitalization
Often used in risk arbitrage. A public company takes on significant additional debt with the purpose of either paying an extraordinary dividend or repurchasing shares, leaving the public shareholders with a continuing interest in a more financially leveraged company. Popular form of shark repellent See: Stub.
leveraged recapitalization
A corporate reorganization in which borrowed funds are used to pay a large one-time dividend to shareholders. The result is a company with greater financial risk because of increased debt and reduced equity. In some instances the dividend is paid in shares of stock rather than cash to inside shareholders who increase their proportional ownership and control.


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Leveraged recapitalization is when a company takes a loan to replace some of the owner s equity.
Transitioning Ownership by ROBERTS, JOHN / Los Angeles Business Journal
The board of directors of CareMatrix Corporation, a Needham, Massachusetts-based assisted living company, has instructed management to explore entering into a leveraged recapitalization or other strategic alterative to maximize shareholder value.
CareMatrix considers going private by ADLER, SAM / Contemporary Long Term Care
The cost of a leveraged recapitalization tends to ne lower than taking the company private in an LBO.
You can be your own white knight by Hackett, Lee P. / Financial Executive
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