Restructuring

• Companies that undergo a buyout automatically go through corporate restructuring. This is because the purchasing company is now in charge of the acquired company; therefore, the purchasing company usually makes changes to executive staff and management, expenditures, budgeting and daily operations. This benefits the current employees of the bought-out company, because the opportunity arises to resolve or perhaps improve issues with previous management.
  
  

Capital Requirement

• A buyout involves a high debt-to-equity ratio. This means that a company can buy out a company with little capital invested. The bought-out company continues to operate and generate revenue. In the event that the revenue is higher than the original cost of the buyout, the purchasing company and stockholders will benefit from the increased value of the company. In the event that a bought-out company struggles, however, the purchasing company will have to take on the responsibility of those debts. This can ultimately put both companies out of business.
  
  

Product Costs

• There are also consumer advantages from a supplier buyout. Certain suppliers have high retail and wholesale costs simply to offset overhead and debt. In the event that a larger or better-managed company buys out a supplier, consumer costs may drop.
  
  

New Product Development and Acquisition

• Products created by one company become the property of the purchasing company upon a buyout. This means that the purchasing company owns all rights to the products. With those rights comes the purchasing company's ability to improve on a current product, offer better pricing or develop new products that are similar to those they acquired. For example, a company can buy out a pen supplier. Using the technology of a pen that they acquired, the new company can go on to develop new, similar products.