Do buyouts (still) create value?
By: Shourun Guo, Edie S. Hotchkiss, Weihong Song.
Contributors: Hotchkiss, Edith, 1961-; Song, Weihong.; National Bureau of Economic Research.
Series: NBER working paper series -- working paper 14187; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 14187.
Publisher: National Bureau of Economic Research
Published: 2008
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "This paper examines whether, and how, leveraged buyouts from the most recent wave of public to private transactions created value.  For a sample of 192 buyouts completed between 1990 and 2006, we show that these deals are somewhat more conservatively priced and lower levered than their predecessors from the 1980s.  For the subsample of deals with post-buyout data available, median market adjusted returns to pre- and post-buyout capital invested are 78% and 36%, respectively.  In contrast, gains in operating performance are either comparable to or slightly exceed those observed for benchmark firms.  We examine the relative contribution of several potential determinants of returns; in addition to gains in operating performance, returns are strongly related to increases in industry valuation multiples.  Overall, our results provide insights into how transactions from the most recent wave of leveraged buyouts created value"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 8/1/2008.

Includes bibliographical references.

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