The use of debt to finance acquisitions (LBOs) is a lever that can be used by financial investors to amplify their returns.

LBOs marked the 1980s in the capital markets, with the most famous case occurring in 1988, when the private equity firm Kohlberg Kravis Roberts & Co. acquired RJR Nabisco for US$1,400,000,000, the largest LBO ever seen at the time. KKR's winning bid ended negotiations that involved essentially all of Wall Street's major investment banks and were described in the book "Barbarians at the Gate" (1989) as an "unprecedented clash of egos" between Henry Kravis (KKR's Managing Partner) and Ross Johnson (RJR Nabisco's CEO).

Although LBOs are commonly seen as a symbol of financial sector greed, authors argue that they were essential in correcting companies that were reinvesting their profits incorrectly and in strengthening shareholder-centered corporate management.