This document summarizes the key aspects of a leveraged buyout (LBO). It defines an LBO as the acquisition of a company using mostly debt rather than equity financing. The document outlines the typical stages of an LBO including raising funds, creating a shell company, purchasing shares/assets, improving operations, and a potential secondary public offering. It also discusses the characteristics of good LBO targets, sources of gains like tax savings and management incentives, and provides an example of KKR's famous LBO of RJR Nabisco in the late 1980s.