Business Recapitalization

A business recapitalization if the reorganization of a company’s capital structure. A Company may seek to save on taxes by replacing stock with interest bearing loans in order to gain interest deductibility. Alternatively, an owner may seek a partial cash out of his ownership interests or to increase debt levels to finance an acquisition.
A business recapitalization is often an exit strategy for venture capitalists and leveraged buyout sponsors. It is the financing technique used by companies and management team to effect a buy-out or share repurchase.

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