Recapitalisation

Definition

A restructuring of a company's capital structure, typically involving a significant change in the mix of debt and equity, without changing the company's total enterprise value. In private equity, dividend recapitalisations (issuing new debt to fund a special dividend to equity holders) are a common mechanism for returning capital to investors prior to exit. Recapitalisations may also be used to bring in new investors, deleverage a distressed balance sheet, or prepare a company for sale.