(FORTUNE Magazine) – Are leveraged buyouts a thing of the past? Not according to Martin Dubilier. His New York City firm, Clayton & Dubilier, recently bought IBM's printer, typewriter, and keyboard businesses with $1.5 billion, mostly bank loans. Dubilier isn't of the slash-and-burn school of LBOs. For one thing, he's a veteran manufacturing executive who will personally watch over R&D at the new company, called Lexmark. For another, IBM holds a 10% stake in Lexmark, and the products will still be sold under the IBM name. Says one of Dubilier's associates: ''The guys in Armonk didn't want a barbarian at the gate.'' Dubilier, 64, got into the LBO game through his friendship with Jerome Kohlberg, a co-founder of Kohlberg Kravis Roberts. They grew up together in New Rochelle, New York. Dubilier even dated the young woman who later married Kohlberg. When Kohlberg did the first LBOs in the 1970s, he hired Dubilier as a turn-around expert. To date, C&D, which Dubilier co-founded in 1978, has bought 16 companies -- including Uniroyal Goodrich and part of Borg-Warner -- and claims an unconfirmable annual compound return of over 110%. Dubilier believes in sharing the wealth: Employees with at least two years' tenure get a cut of the firm's profits. Dubilier's secretary, for example, is worth over $3 million.