Capital for an LBO can come from banks ... If the combined companies can't meet their debt obligations using the combined cash flow of the two companies, the acquired company could go bankrupt.
"In an LBO Model, Step 1 is making assumptions about ... In Step 4, you project out the company's Income Statement, Balance Sheet and Cash Flow Statement, and determine how much debt is paid ...
A leveraged buyout (LBO) is an acquisition in the business ... can't meet their debt obligations using the combined cash flow of the two companies, the acquired company could go bankrupt.