buyout

noun
buy·​out | \ ˈbī-ˌau̇t How to pronounce buyout (audio) \

Definition of buyout

 (Entry 1 of 2)

1 : an act or instance of buying out
2 : a financial incentive offered to an employee in exchange for an early retirement or voluntary resignation

buy out

verb
bought out; buying out; buys out

Definition of buy out (Entry 2 of 2)

transitive verb

1 : to purchase the share or interest of
2 : to purchase the entire stock-in-trade and the goodwill of (a business)

Examples of buyout in a Sentence

Recent Examples on the Web: Noun But the acquisition also added to Hertz’s debt pile, which already was substantial thanks to the earlier leveraged buyout. David Welch, Bloomberg.com, "O.J., Accounting Fraud, Icahn: The Story of Hertz Going Bust," 24 May 2020 Formation led the buyout of Genesis Healthcare, the nation’s largest nursing home operator, in 2007; Genesis returned to the public markets seven years later. Matthew Goldstein, New York Times, "Push for Profits Left Nursing Homes Struggling to Provide Care," 7 May 2020 The final day of work for those who take the buyout will be no later than May 14. USA TODAY, "Turtle Derby, cleaner subways, Zoom meeting hacked: News from around our 50 states," 2 May 2020 The Wall Street Journal first reported the voluntary buyouts at Boeing. Julie Johnsson, Fortune, "Boeing expected to announce voluntary buyouts in message to all 161,000 employees," 2 Apr. 2020 The buyouts are the latest aggressive move to contain the financial damage. Aaron Gregg, BostonGlobe.com, "Boeing offers employees buyouts as US economy shudders," 2 Apr. 2020 A week before Thanksgiving, Celia Garcia Johnson got on the phone with Elizabeth Clampitt, a senior vice president at JLL and the residents’ point of contact for the buyouts. Marina Koren, The Atlantic, "Why SpaceX Wants a Tiny Texas Neighborhood So Badly," 31 Mar. 2020 With the buyout, Carroll will become an unrestricted free agent. Jeff Mcdonald, Houston Chronicle, "Spurs part ways with DeMarre Carroll, expected to sign with Rockets," 17 Feb. 2020 Employees who are eligible for a buyout will hear from the university’s Division of Human Resources on May 11. Robin Goist, cleveland, "Kent State’s Board of Trustees approves employee pay cuts, buyouts to cut expenses during coronavirus pandemic," 6 May 2020

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'buyout.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of buyout

Noun

1907, in the meaning defined at sense 1

Verb

1598, in the meaning defined at sense 1

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Time Traveler for buyout

Time Traveler

The first known use of buyout was in 1598

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Statistics for buyout

Last Updated

1 Jun 2020

Cite this Entry

“Buyout.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/buyout. Accessed 7 Jun. 2020.

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More Definitions for buyout

buyout

noun

Financial Definition of buyout

What It Is

A buyout is the purchase of at least 51% of a company. Under a buyout, the previous ownership loses control over the company in exchange for compensation.

How It Works

The buyout process usually begins when an interested purchaser or group of purchasers makes a formal buyout offer to a company's board of directors, who are the representatives of the company's shareholders. Negotiations and/or a tender offer ensue, and the board of directors eventually either recommends that the shareholders sell their shares to the purchaser or discourages the shareholders from doing so. Company managers and directors do not always welcome buyout offers, but because the shareholders ultimately decide whether to sell the company, people consider some buyouts hostile and others friendly. Regardless, the purchaser usually pays a premium for shares that give it controlling interest in a company.

Companies, private individuals, private equity firms, pension funds, lenders, and other institutions usually conduct or supply the money for buyout transactions. Companies that specialize in buyouts (buyout firms) exist solely to fund and facilitate buyouts, and they may act alone or together on a deal. They usually get their money from institutional investors, wealthy individuals, or loans.

Buyout firms usually seek out and purchase underperforming or undervalued companies in order to "fix" them and sell them or take them public many years later. When it sells one of its companies, the buyout firm takes a commission, which it passes on to its investors. Buyout firms are also often involved in management buyouts, which are buyouts conducted by the management of the company being purchased, and they often play key roles in leveraged buyouts, which are buyouts that are funded with borrowed money.

Why It Matters

Buyouts occur for several reasons. Some occur because the purchaser believes a company's assets are undervalued and can be resold for a profit. Others occur because the purchaser believes it will receive financial and strategic benefits from the buyout such as higher revenues, easier entry into new markets, less competition, or improved operational efficiency. Ultimately, nearly all buyouts occur because the purchaser believes it can provide more value to a company's shareholders than the company's current management can.

Source: Investing Answers

buyout

noun
How to pronounce buy out (audio)

English Language Learners Definition of buyout

: the act of gaining control of a company by buying the parts of it you do not own

buyout

noun
buy·​out | \ ˈbī-ˌau̇t How to pronounce buyout (audio) \

Legal Definition of buyout

 (Entry 1 of 2)

: an act or instance of buying out

Legal Definition of buy out (Entry 2 of 2)

1 : to purchase the share or interest of
2 : to purchase the entire tangible and intangible assets of (a business)

More from Merriam-Webster on buyout

Rhyming Dictionary: Words that rhyme with buyout

Nglish: Translation of buyout for Spanish Speakers

Comments on buyout

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