Which of the following is one of the three main exit strategies for an LBO?

• A. Bankruptcy acquisition
• B. Sale of company
• C. Debt consolidation
• D. Asset liquidation

Answer: (B)

The sale of the company is one of the three main exit strategies used in leveraged buyouts (LBOs). When a private equity firm acquires a company through an LBO, their ultimate goal is to sell that investment at a profit after a few years. This sale can take various forms, including selling the company to another strategic buyer or another private equity firm, or through an initial public offering (IPO) where the company is listed on a stock exchange.

The sale of the company allows the private equity firm to realize returns on their investment after having improved the operational performance and profitability of the company during its ownership. This strategy is often preferred because it can provide a significant financial gain based on the increase in the company's value that was achieved during the investment period, making it a pivotal exit strategy in the LBO landscape.