Publications
Publications
- August 1988 (Revised July 1996)
- HBS Case Collection
Colt Industries
Abstract
Colt Industries is a conglomerate that is considering undertaking a leveraged recapitalization. The deal would involve a large one-time dividend to stockholders, which would be financed by over $1 billion in new debt. Unlike in an leveraged buyout, however, public shareholders would still retain an equity interest in the company. Shareholders in the company's employee savings plan would not receive the dividend, but instead would see their percentage ownership in the company substantially increased.
Keywords
Business Conglomerates; Equity; Economic Growth; Ownership Stake; Stocks; Borrowing and Debt; Employee Stock Ownership Plan; Financial Strategy
Citation
Stein, Jeremy C. "Colt Industries." Harvard Business School Case 289-012, August 1988. (Revised July 1996.)