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| Tekijä: | Boucly, Q. Sraer, D. Thesmar, D. |
| Otsikko: | Growth LBOs |
| Lehti: | Journal of Financial Economics
2011 : NOV, VOL. 102:2, p. 432-453 |
| Asiasana: | France equities capital investment credit control private companies |
| Kieli: | eng |
| Tiivistelmä: | Using a data set about 839 French deals, we examine the change in corporate behavior after a leveraged buyout (LBO) compared to an adequately chosen control group. In the 3 years following a leveraged buyout, targets turn more profitable, grow much faster than the peer group, issue additional debt, and raise capital expenditures. Evidence is provided consistent with the idea that in our sample, private equity funds create value by easing credit constraints, letting LBO targets take advantage of hitherto unexploited growth possibilities. First, post-buyout growth is concentrated in private-to-private transactions, i.e., those where the seller is an individual, contrary to divisional buyouts or public-to-private LBOs where the seller is a private or a public firm. Second, the observed post-buyout growth in size, in debt and in capital expenditures are more substantial when the targets operate in an industry that depends more on external finance. These results conflict with existing evidence of LBO targets investing less or downsizing. |
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