Scanning for More Takeover Targets
On Wednesday, we looked at companies that could be potential takeover candidates because of low debt levels and high free cash flow relative to market capitalization. This type of company makes sense for financial buyers.
A private-equity firm or LBO firm has room on its balance sheet to add debt, and the target company's operations are producing enough cash to service the debt. Much of the return for financial buyers in the past few years has come in the form of takeout dividends and strong free cash flow, and low debt means the target can be levered substantially and cash taken out for the partners....595 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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