asset stripping


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Asset Stripping

A form of corporate raiding in which a company acquires a target company and then sells some of its assets, usually to repay its (the corporate raider's) debt. Often this debt is the debt incurred in the process of taking over the target company. The corporate raider conducts asset stripping because he believes that selling some of the assets will both repay the debt and leave the raider with enough extra assets to increase its net worth. In the process of deciding which companies to acquire, asset strippers look for companies worth more as individual assets than as companies.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

asset stripping

The sale of selected assets of an acquired company generally for the purpose of raising money to pay off some of the debt incurred in financing the acquisition.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
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Pen points
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