Buyouts
Working Paper
Deal Insurance: Representation & Warranty Insurance in Mergers and Acquisitions
Efficient contracting depends upon imposing risk on the party with superior access to information. Yet the parties in mergers and acquisitions transactions now commonly use Representation and Warranty Insurance (“RWI”) to shift this risk to a...Read more
The Effect of Institutional Investors' Voice on the Terms and Outcome of Freeze-out Tender Offers
We study the impact of institutional investors' “voice” on 201 going private tender offers by controlling shareholders ("freeze-out" offers) in Israel. Israeli regulatory intervention in freeze-out tender offers is relatively mild, thus...Read more
Private Equity and Human Capital Risk
We study the human-capital effects of private equity buyouts in Germany. We conduct matched-sample difference-in-differences estimations at the establishment and at the individual employee level with more than 152,000 buyout employees and a...Read more
Leveraged Buyouts: An Overview of the Literature
This paper provides an exhaustive literature review of the motives for public-to-private LBO transactions. First, the paper develops the theoretical framework for the potential sources of value creation from going private: a distinction is made...Read more
The Employment Consequences of Private Equity Acquisitions: The Case of Institutional Buy Outs
There is a growing controversy as to the impact of private equity acquisitions, especially in terms of their impact on employment and subsequent organizational performance. It has been suggested that closer owner supervision and the injection of...Read more
Fund Managers under Pressure: Rationale and Determinants of Secondary Buyouts
The fastest growing segment of private equity deals are secondary buyouts - sales from one PE fund to another. Using a comprehensive sample of leveraged buyouts we investigate whether SBOs are value-maximizing, or reflect opportunistic behavior....Read more
The Performance of Secondary Buyouts
Buyout funds increasingly sell their portfolio companies to other buyout funds. These secondary buyouts (SBOs) underperform primary buyouts. Yet, only SBOs made late in the investment period underperform, consistent with funds using SBOs to...Read more
Do Managers Manipulate Earnings Prior to Management Buyouts?
To address the question as to whether managers manipulate accounting numbers
downwards prior to management buyouts (MBOs), we implement an industry-adjusted
buyout-specific approach and receive an affirmative answer. In UK buyout...Read more
Borrow Cheap, Buy High? The Determinants of Leverage and Pricing in Buyouts
Private equity funds pay particular attention to capital structure when executing leveraged buyouts, creating an interesting setting for examining capital structure theories. Using a large, detailed, international sample of buyouts from 1980-2008...Read more
Private Equity vs PLC Boards in the U.K.: A Comparison of Practices and Effectiveness
We interview 20 executives in the UK who have been members of both PE and PLC boards of relatively large companies. The main difference we find in PE and PLC board modus operandi is in the single-minded value creation focus of PE boards versus...Read more
Corporate Governance and Value Creation: Evidence from Private Equity
We examine deal-level data from 395 private equity transactions in Western Europe initiated by large private equity houses during the period 1991 to 2007. We un-lever the deal-level equity return and adjust for un-levered return to quoted peers...Read more