recapitalization

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Recapitalization

The act of changing a company's capital structure. For example, a highly leveraged company (one that is largely financed with debt) may repay most of its debt and issue stock so that it is financed with equity. On the other hand, a company may make a self-tender offer and buy back most of its stock while issuing bonds so that it becomes debt-financed. Some companies may believe that recapitalization can be advantageous, but the capital structure irrelevance principle states that a company's capital structure has no bearing on its profitability. Recapitalization is also called an e-type reorganization.

recapitalization

A change a company makes in the long-term financing mix it uses. For example, a firm may borrow long-term funds (that is, it may sell bonds) in order to acquire the money needed to repurchase a block of its outstanding stock. Because recapitalization will often affect the level and the volatility of earnings per share, it is of interest to stockholders. Recapitalization often occurs when a firm attempts to reorganize while in bankruptcy proceedings.
References in periodicals archive ?
For this purpose, the word "transfer" can, under certain circumstances, include a recapitalization or other change in the corporation's capital structure; see Sec.
Michaels is arranging $200 million of preferred equity for the recapitalization of a premier office building located on the West Side of Manhattan.
One popular method of maximizing shareholder value while remaining independent is to perform a leveraged recapitalization, or a recap.
Commenting on the recapitalization, Charlie Appleby, President of Advanced Disposal, stated, "This marks an exciting new chapter for the company.
The firm invests in management buyouts, leveraged buildups and recapitalizations of established growth businesses.
Simultaneous with the CMX acquisition, Trivest led a dividend recapitalization of Schoor DePalma with the Company's existing lender, American Capital Strategies.
WASHINGTON -- Allied Capital Corporation (NYSE:ALD) announced today that it has invested $162 million to finance a management-led recapitalization of Norwesco, Inc.
OTCBB:FOTO) announced today that it has successfully negotiated a recapitalization plan that, if approved by shareholders, will result in a simplified capital structure for the Company and a cash infusion to strengthen the Company's balance sheet and expand PhotoWorks' digital marketing activities.
Along with our traditional focus in technology and healthcare, TA Associates has found an increasing number of attractive opportunities for buyouts and recapitalizations of companies in these areas.
Jacquet also discusses how a company can utilize the benefits of a recapitalization to acquire competitors to increase market share.
MSN), a leading provider of temporary nurses and staffing solutions for the healthcare industry, announced today that it completed the previously announced recapitalization of the Company led by the investment firm Warburg Pincus.
Bruce Johnston will immediately enhance our investment efforts in technology recapitalizations and buyouts," said C.