Private equity (PE) financing is money invested by PE firms in privately owned businesses. PE financing is often used to buy out some or all of the ownership interests of the owners of a business (target company). PE firms often use debt to finance these buyout transactions—with the target company taking on significant loans to secure the money (capital) to buy out the current owners of the business. The target company must, of course, pay back these loans from its lenders, with interest. Because of this use of debt financing, these buyouts have traditionally been called leveraged buyouts (LBOs).

In Kansas, as in other states, private equity (PE) financing is a common method for funding the acquisition or expansion of businesses. PE firms invest in companies that are not publicly traded, often with the goal of eventually selling the company at a profit. Leveraged buyouts (LBOs) are a specific type of PE transaction where the PE firm uses a significant amount of borrowed money to acquire a company. The acquired company (target company) assumes the debt and is responsible for repaying it. The legal framework for these transactions in Kansas is governed by a combination of state statutes, such as the Kansas Revised Limited Liability Company Act and the Kansas General Corporation Code, and federal laws, including securities laws enforced by the Securities and Exchange Commission (SEC) and tax regulations. These laws regulate the formation, operation, and dissolution of businesses, as well as the reporting requirements for companies and the conduct of PE firms. It is important for companies engaging in LBOs to comply with these regulations to ensure the legality of the transaction and to protect the interests of all parties involved.