Download or read book Value Creation in Leveraged Buyouts written by Nicolaus Loos and published by Springer Science & Business Media. This book was released on 2007-11-05 with total page 490 pages. Available in PDF, EPUB and Kindle. Book excerpt: Based on a dataset of over 3,000 leveraged buyout transactions, including performance data, Nicolaus Loos analyses how financial investors create economic value through their investments. He shows that various exogenous factors with respect to timing, industry, public market as well as deal specific factors can statistically be related to a buyout deal's performance. He also provides evidence of a "GP effect" in leveraged buyouts, i.e. that certain characteristics of a Private Equity firm and its investment professionals as well as a firm's buyout strategy approach and certain buyout target characteristics are important success factors.

Download or read book Value Creation Drivers in Large Leveraged Buyouts written by Daniel Ilg and published by . This book was released on 2016 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: This work employs the most complete data sample of large private equity backed transactions in Germany ranging from 1997 to 2008. This research casts light on the impact of the holding period, the effects of divesting activities and expectations about the future shape of the economy on the performance of deals. A longer holding period is associated with a lower internal rate of return, and, contrary to expectations, this study finds a return diminishing effect of selling subsidiaries of target companies. In addition, I apply a new measure of business expectation: ifo slope. Ifo slope incorporates the theory of the interest term structure as a business economic development indicator. Positive expectations at entry lead to higher returns in the future and periods of economic downturn are stretching the length of the investment dramatically. Finally, larger deals are financed more aggressively with debt and generate more value by multiple expansion than smaller deals.

Download or read book Reverse Leveraged Buyout written by Pierre-Alain Masson and published by . This book was released on 2008 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This study offers an approach to the value creation problem in Reverse Leveraged Buyout (RLBO) transactions. It presents an overview of the actual state of the Private Equity industry and a description of RLBO stakeholders, rationale, processes and products. The different drivers of the value creation or destruction during the private period ownership are exposed and depicted with a sample case. The methodology for the analysis includes an asset pricing perspective (CAPM) and a financial statements analysis. The goal of the case is to examine what would've happen to the value of the firm if the firm were not gone private. The work should be read from the point of view of an investor considering to buy shares from a PE-backed IPO firm.

Download or read book Drivers of Value Creation in a Secondary Buyout written by Ann-Kristin Achleitner and published by . This book was released on 2014 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Purpose - While secondary buyouts have gained in importance in recent years, specific drivers of value creation of this type of private equity deal are not yet well understood. Through the in-depth analysis of the acquisition of Brenntag by BC Partners, we develop propositions on the value creation profile in secondary buyouts. Design/methodology/approach - We use a single case study design to explore the information-rich context of a secondary buyout. The Brenntag case epitomizes the development of a company from being part of a large conglomerate to being private equity owned after the primary and secondary buyout up to being publicly listed. Our analysis is based on nine semi-structured interviews with key protagonists and the analysis of primary company data as well as additional secondary data sources. Findings - We propose that even if the investment management and monitoring skills of the primary and secondary private equity group are similar there is still the potential to realize operational improvements in a secondary buyout due to either an early exit of the primary private equity group or measures that further enhance management incentivisation. Furthermore, the Brenntag case shows that low information asymmetries can lead to higher leverage and that opportunities for multiple expansion are limited in secondary buyouts.Originality/value - While a secondary buyout has been a common exit route in recent years, we are the first to undertake an in-depth case analysis of a secondary buyout. Our study helps researchers and practitioners to enhance their understanding of drivers behind the value creation profile of secondary buyouts.

Download or read book Modeling Leveraged Buyouts Simplified written by Senith Mathews and published by . This book was released on 2019-12-18 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: Modeling Leveraged Buyouts - Simplified is for MBA, CFA or undergraduate finance students interested in understanding and modeling leveraged buyouts ('LBO'). This book is also helpful for financial executives and others interested in understanding and modeling LBOs. It is a wonderful resource for students or professionals interviewing for jobs in the private equity, investment banking or hedge fund industry because it will teach you how to build a basic LBO model in 1-2 hours.This book assumes that the reader is familiar with basic finance and accounting concepts. For example, the reader is expected to know the structure of an income statement, the meaning of the term working capital, internal rate of return (IRR) and multiples. The reader is NOT expected to be an expert in Microsoft Excel but has to be reasonably familiar with Microsoft Excel. No two LBO transactions are exactly alike. Each LBO transaction will have unique features, characteristics and structure. This book will teach you how to build a simple LBO model. Once you can confidently build a simple LBO model, you can add many bells and whistles to reflect the numerous specifics of the LBO transaction you are considering or modeling.Modeling Leveraged Buyouts - Simplified is based on Senith Mathews' experience tutoring students and executives in financial modeling over 10 years and building models as a management consultant with Arthur Andersen and Mercer Management Consulting (now Oliver Wyman). Modeling Leveraged Buyouts - Simplified narrowly focusses on modeling leveraged buy outs given the surge in interest in LBOs. The first part of Modeling Leveraged Buyouts - Simplified (chapters 1-5) walks you through building and analyzing an LBO model step by step. The first chapter of the book lays the foundations of the LBO model outlining the basic principles, components and structure of an LBO model. The second chapter lists and describes the ingredients of an LBO model. This chapter covers the background and assumptions required to build an LBO model. The third chapter of the book shows you how to build the heart of an LBO model: the cash flow projections. It is the cash flow projections that drive investment returns and performance. The fourth chapter of the book teaches you how to develop the output of an LBO model. Here we look at how to compute the key metrics in an LBO transaction. You will see how a project's returns differs from the private equity investor's returns and how a project may give poor returns but the private equity investor generates huge returns from the same LBO transaction. The fifth chapter of this book teaches you how to analyze the LBO model you have just built. We show you why and how sensitivity analysis is done. We also study how an LBO will create value and teach you how to quantify the value generated by the different drivers of value creation in chapter 5.

Download or read book Leveraged Buyouts written by Luc Renneboog and published by . This book was released on 2017-06-23 with total page 104 pages. Available in PDF, EPUB and Kindle. Book excerpt: Leveraged Buyouts: Motives and Sources of Value analyzes the motives for taking public firms private and provides a structured and critical review of the empirical research in this area. The authors examine which types of firms go private and the determinants of takeover premiums in LBO transactions; investigate whether the post-transaction value creation, as well as the duration of the private status, can be explained by the aforementioned potential value drivers; answer the questions whether or not Public-to-Private (PTP) transactions lead to superior organizational forms compared to public firms, and whether going private is a shock therapy to restructure firms generating both strong short- and long-term returns; and document the trends and drivers of global LBO activity in the 1980s, 1990s, and the subsequent decades. After a short introduction, Section 2 briefly discusses on the different types of leveraged buyouts and going-private transactions. Section 3 discusses the theoretical considerations underlying the sources of wealth gains from going private deals. Section 4 focuses on the four main strands of the literature - namely, on the Intent to do an LBO, on the Impact of the LBO measured by changes in the share price returns, on the LBO Process or on how the firm is restructured in the post-LBO stage, and on the Duration of being a private firm - and on the empirical evidence supporting the eight motives proposed by each strand of the literature. Section 5 explains the drivers behind the observed LBO waves that emerged over the past 35 years. Section 6 lines out a future research agenda.

Download or read book Leveraged Management Buyouts written by Yakov Amihud and published by Beard Books. This book was released on 2002 with total page 292 pages. Available in PDF, EPUB and Kindle. Book excerpt: Papers presented at a conference held at the Leonard N. Stern School of Business, New York University, on May 20, 1988, and sponsored by the Salomon Brothers Center for the Study of Financial Institutions. The 1989 edition of this proceedings volume was published by Dow-Jones-Irwin. Academics, legis

Download or read book Current Topics in Private Equity written by Magnus Pflücke and published by . This book was released on 2014 with total page 246 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Behind the Curve An Analysis of the Investment Behavior of Private Equity Funds written by Christian Deger and published by Diplomica Verlag. This book was released on 2013 with total page 81 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the domain of corporate acquisitions, leveraged buyouts (LBO) have gained tremendous importance since their first appearance in the late 1970?s. After having suffered from different economic downturns throughout the years, buyouts have become a major force in the worldwide economy, and reached a record accumulated transaction value of $878bn in 2007. LBOs are generally conducted by a private equity (PE) firm through a buyout fund. The fund manager raises a certain amount of equity from outside investors, and invests it into later-stage companies for an average holding period of around five years. An important characteristic of an LBO is that investments are not only financed by equity capital from the fund but, also with a significant amount of debt which is raised individually on a deal-by-deal basis. Moreover, the compensation of both fund managers, and equity investors is not based on the individual investment itself but, on the success of the whole fund. As a result, the particular conditions of buyout investments in a fund setting, as well as the distinct incentive structure of buyout funds, facilitate an increased sensitivity of fund managers with regard to the current state of their fund. This may also influence their leverage and pricing decisions on the transaction level. Corresponding research on buyout structuring is still in its infancy. While there is an increasing amount of empirical literature on the various determinants of leverage and pricing in buyout transactions, little is known about how the investment behavior of buyout funds drives these structuring decisions. A notable exception is the work by Axelson, et al. (2009), who developed a theoretical model that is based on a principal agent conflict between fund managers and outside investors. The model provides a number of predictions on how the investment behavior of fund managers impacts leverage, and decisions about prices at investment entry. The main goal of this study is to identify the forces behind these decisions, and to verify empirically the predictions of the Axelson, et al. (2009) model. Therefore, the work of Axelson, et al. (2009), supplemented with additional literature on LBO leverage and pricing, as well as the investment behavior of buyout funds, forms the theoretical part of the study. Based on the findings of this theoretical part, three hypotheses are formulated, and tested through the use of comprehensive investment pressure variables that were developed on the basis of a representative dataset of 1,190 buyout transactions which were completed between 1985 and 2009.

Download or read book Handbook of Empirical Corporate Finance written by Bjørn Espen Eckbo and published by Elsevier. This book was released on 2011-10-13 with total page 605 pages. Available in PDF, EPUB and Kindle. Book excerpt: This second volume of a two-part series examines three major topics. First, it devotes five chapters to the classical issue of capital structure choice. Second, it focuses on the value-implications of major corporate investment and restructuring decisions, and then concludes by surveying the role of pay-for-performance type executive compensation contracts on managerial incentives and risk-taking behavior. In collaboration with the first volume, this handbook takes stock of the main empirical findings to date across an unprecedented spectrum of corporate finance issues. The surveys are written by leading empirical researchers that remain active in their respective areas of interest. With few exceptions, the writing style makes the chapters accessible to industry practitioners. For doctoral students and seasoned academics, the surveys offer dense roadmaps into the empirical research landscape and provide suggestions for future work. Nine original chapters summarize research advances and future topics in the classical issues of capital structure choice, corporate investment behavior, and firm value Multinational comparisons underline the volume's empirical perspectives Complements the presentation of econometric issues, banking, and capital acquisition research covered by Volume 1

Download or read book Value Creation of Buyout Funds written by Samuel Hiller and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This Bachelor thesis aims to contribute to the existing research on value creation in leveraged buy-outs by empirically analysing a current sample of portfolio companies in buyout funds. After a brief market review and an introduction to the workings of private equity as an asset class, a detailed overview of existing levers regarding value generation is provided, followed by the theoretical foundation and mathematical deduction of a buyout investment's core performance drivers. This framework provides the cornerstone of the subsequent empirical analysis which intends to answer four questions: (a) What drives the returns of leveraged buyouts? (b) How are these returns influenced by various factors, e.g. the transaction size? (c) How do buyout firms create value in their portfolio companies? and (d) do private equity backed companies perform better than comparable public industry peers? The key finding of this study confirms the assumed replacement of the leverage effect by a company's operating performance as the most important driver of buyout performance. In order to differentiate themselves from other buyout firms, LBO investors need to actively engage in portfolio company management to achieve significant improvements in operating performance and thus superior returns in a mature market. Furthermore, results highlight a positive influence of buyout investors on margin developments when compared to public industry peers. Private equity backed companies achieve substantially higher margin growth rates during the post-acquisition phase, despite their on average already superior performance prior to the buyout.

Download or read book Value Creation in Leveraged Buyouts written by Nicolaus Loos and published by . This book was released on 2005 with total page 380 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Organizational Changes and Value Creation in Leveraged Buyouts written by George Pierce Baker and published by . This book was released on 1990 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Oxford Handbook of Private Equity written by Douglas Cumming and published by Oxford University Press. This book was released on 2012-03-15 with total page 769 pages. Available in PDF, EPUB and Kindle. Book excerpt: The term private equity typically includes investments in venture capital or growth investment, as well as late stage, mezzanine, turnaround (distressed), and buyout investments. It typically refers to the asset class of equity securities in companies that are not publicly traded on a stock exchange. However, private equity funds do in fact make investments in publicly held companies, and some private equity funds are even publicly listed. Chapters in this book cover both private and public company investments, as well as private and publicly listed private equity funds. This Handbook provides a comprehensive picture of the issues surrounding the structure, governance, and performance of private equity. It comprises contributions from 41 authors based in 14 different countries. The book is organized into seven parts, the first of which covers the topics pertaining to the structure of private equity funds. Part II deals with the performance and governance of leveraged buyouts. Part III analyzes club deals in private equity, otherwise referred to as syndicated investments with multiple investors per investees. Part IV provides analyses of the real effects of private equity. Part V considers the financial effects of private equity. Part VI provides analyzes of listed private equity. Finally, Part VII provides international perspectives on private equity.

Download or read book Mastering Private Equity written by Claudia Zeisberger and published by John Wiley & Sons. This book was released on 2017-08-07 with total page 368 pages. Available in PDF, EPUB and Kindle. Book excerpt: The definitive guide to private equity for investors and finance professionals Mastering Private Equity was written with a professional audience in mind and provides a valuable and unique reference for investors, finance professionals, students and business owners looking to engage with private equity firms or invest in private equity funds. From deal sourcing to exit, LBOs to responsible investing, operational value creation to risk management, the book systematically distils the essence of private equity into core concepts and explains in detail the dynamics of venture capital, growth equity and buyout transactions. With a foreword by Henry Kravis, Co-Chairman and Co-CEO of KKR, and special guest comments by senior PE professionals. This book combines insights from leading academics and practitioners and was carefully structured to offer: A clear and concise reference for the industry expert A step-by-step guide for students and casual observers of the industry A theoretical companion to the INSEAD case book Private Equity in Action: Case Studies from Developed and Emerging Markets Features guest comments by senior PE professionals from the firms listed below: Abraaj • Adams Street Partners • Apax Partners • Baring PE Asia • Bridgepoint • The Carlyle Group • Coller Capital • Debevoise & Plimpton LLP • FMO • Foundry Group • Freshfields Bruckhaus Deringer • General Atlantic • ILPA • Intermediate Capital Group • KKR Capstone • LPEQ • Maxeda • Navis Capital • Northleaf Capital • Oaktree Capital • Partners Group • Permira • Terra Firma

Download or read book Value Creation in Successful LBOs written by Daniel Pindur and published by Springer Science & Business Media. This book was released on 2009-05-21 with total page 339 pages. Available in PDF, EPUB and Kindle. Book excerpt: Daniel Pindur analyzes value creation in successful LBOs on investment level conceptually and empirically from an LBO equity investor perspective. Based on the LBO transaction model, the author decomposes total proceeds to LBO equity investors and derives a two-tier framework of an internal and an external perspective, thereby structuring the conceptual discussion of various determinants affecting these components.

Download or read book Creditor Protection in Private Equity Backed Leveraged Buyout and Recapitalisation Practices written by Hasan Erdem ?i?mangil and published by BWV Verlag. This book was released on 2014-11-17 with total page 463 pages. Available in PDF, EPUB and Kindle. Book excerpt: Private equity-backed leveraged buyout (LBO) and leveraged recapitalisation practices have been on the rise since the early 1970s when the LBO model was first invented. They continue to play a major role for investors for their less transparent and less bureaucratic investment models outside of capital markets, where financial regulations become tighter following the financial crisis of 2008 affecting global capital markets in a chain reaction. Private equity-backed LBOs and leveraged recapitalisations continue to be popular investment models, however they carry risks both at the target company level and on a macroeconomic level due to the interconnectedness of these investments with global capital markets for funding and refinancing of acquisition finance debts. Creditor protection mechanisms of company and insolvency law therefore play a central role in preventing or dealing with failures that may be triggered at the target company level and have detrimental effects for all creditors and the economy. Though the European legal capital system must be critically revisited, England's and Germany's already mature markets and legal systems should help in developing a better interpretation of these rules in developing economies like Turkey, consequently establishing a solid base for this investment practice in these economies.