This paper investigates the relationship between leverage and returns in private equity buyout transactions. In contrast to the predictions of traditional capital structure theory, we find that transactions financed with large amounts of debt are associated higher transaction prices and lower...

Using a dataset comprising 88 Private Equity (PE) backed Leveraged Buyouts (LBOs) completed and exited during the period 1999-2008, this study sheds new light on the impact of buyout vendor source and PE investor experience on post-buyout efficiency during the first 3 years after the...

We examine the impact of target management involvement as bidders in a sample of completed going-private buyouts. Announcement period and long run target shareholder returns do not appear to be lower in management involved deals. We attempt to identify disciplining mechanisms in the takeover...

We study the impact of PE firm and buyout characteristics on default probability employing a Cox proportional hazards model to a global sample of 5,093 buyouts between 1997 and 2012. Our results indicate that investments of generalists have lower default probability than those of specialists....

This paper introduces the impact of debt misvaluation on merger and acquisition activity. Debt misvaluation helps explain the shifting dominance of financial acquirers (private equity firms) relative to strategic acquirers (operating companies). The effects of overvalued debt might seem limited...

By holding assets longer and increasingly focusing on growth strategies private equity firms enter the territory of strategic buyers. In one such strategy, a private equity firm buys a company and then builds on that "platform" through add-on acquisitions. We ask whether such serial...