Leveraged buyout is also called financing merger and acquisition, and leveraged buyout is a kind of financing means for enterprises. Refers to the strategy of a company or individual to buy a company with the assets of the target as debt collateral. The main body of leveraged buyout is generally a professional financial investment company. The purpose of an investment company's acquisition of the target enterprise is to acquire the company at a suitable price, increase the company's value through operation, and increase the investment income through financial leverage. Under normal circumstances, investment companies only pay a small part of the funds, most of which come from bank mortgage loans, institutional loans and the issuance of junk bonds (high-interest and high-risk bonds), which are guaranteed by the assets, future cash flow and income of the acquired company to repay the principal and interest. If the acquisition is successful and the expected income is achieved, the lender cannot share the income brought by the appreciation of the company's assets (unless there is a debt-to-equity swap agreement). During the operation, it may be necessary to arrange bridge loan as short-term financing first, and then complete the acquisition by borrowing (borrowing or borrowing money). In foreign countries, leveraged buyouts are often a new company with highly concentrated equity and highly leveraged financial structure. In China, as junk bonds have not yet emerged, most acquirers use the equity of the acquired company as collateral and borrow money from banks to complete the acquisition.