buyout

noun
buy·out | \ ˈbī-ˌau̇t \

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

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

One alternative to insuring repetitive-loss properties is offering buyout programs. Kimberly Dark, Curbed, "Living on the edge," 6 June 2018 And Nexstar Media Group, which completed a major merger just last year, has just been approached by Apollo about a possible buyout. Christa Case Bryant, The Christian Science Monitor, "As news ownership consolidates, will local TV become more partisan?," 13 July 2018 The Mavericks didn’t announce a buyout of his contract from Real Madrid until Tuesday. Greg Moore, azcentral, "Moore: Breaking down Suns buzz, speculation from NBA Summer League," 10 July 2018 The company went private in 2013 following a $25 billion buyout by Dell and Silver Lake. Chaim Gartenberg, The Verge, "Dell will again become a publicly-traded company in $22 billion buyout," 2 July 2018 There are buyout offers for eligible employees and staff transfers to shut down specific areas of work. Andrew A. Rosenberg, Scientific American, "The Trump Administration’s War on Science Agencies Threatens the Nation’s Health and Safety," 1 Jan. 2018 Even though the buyout offer and a restructuring of upper management positions announced last month are coming at nearly the same time, the moves are unrelated, company spokesman Phil Lynch previously said. Grace Schneider, The Courier-Journal, "Brown-Forman reports strong fiscal 2018 results amid buyouts," 6 June 2018 Rather than a series of missteps in handling testing data, Fresenius officials say Akorn executives deliberately ignored the data-integrity problems until the buyout offer forced them to come clean. Bloomberg.com, "Akorn Accused of Sending Phony Data to FDA on Antibiotic," 2 May 2018 Founded in 2002, SmugMug has been around even longer than Flickr and, from the start, has defied conventional wisdom in Silicon Valley, never taking a dime from outside investors or entertaining buyout offers. Jessica Guynn, USA TODAY, "Exclusive: Flickr bought by SmugMug, which vows to revitalize the photo service," 20 Apr. 2018

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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Phrases Related to buyout

leveraged buyout

Statistics for buyout

Last Updated

22 Sep 2018

Look-up Popularity

Time Traveler for buyout

The first known use of buyout was in 1598

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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

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 \

Legal Definition of buyout 

(Entry 1 of 2)

: an act or instance of buying out

buy out

transitive verb

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)

Comments on buyout

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