What you are describing is just normal financing. IE using debt or equity to fund additional business activities. My understanding of a leveraged buyout is that

What you are describing is just normal financing. IE using debt or equity to fund additional business activities. My understanding of a leveraged buyout is that it usually means: Buying a company using its own balance sheet. Borrowing at a high rate. Paying back the loan using the companies own cash flow. Selling the debt-ridden company off. I feel like I am missing something. If it can service these massive loans, why isn't it worth more? How does it become worth more after taking on this (expensive) debt? If the company is so under financed that junk bond rate debt is going to be well worth it, any form of financing should do. Why would you need a private equity fund to do that? I never hear private equity funds described as "experts at finding under financed companies and growing them to full potential."