Acquisitions of private-equity-backed private companies: Insights from acquirer’s choice of target and the implications on deal value through the subprime crisis
Notice bibliographique
Résumé
Objective: This study explores the characteristics of worldwide acquisitions of private-equity-backed (PE) private companies. It examines the impact of the subprime crisis, the acquirer’s choice of target, and the implications on deal value. Research Design & Methods: This study uses deal-level data on worldwide PE-backed private company acquisitions that were completed between 2000 and 2017. Research methods to test the hypotheses include data visualization, comparative analysis, and regression analysis. Findings: Data visualization indicates that North America was the most popular region for PE-backed private company acquisitions, followed by Europe and Asia. Industry sectors such as the services sector, the technology sector, the manufacturing sector, and the healthcare, and biotechnology sectors were popular. Comparative analysis indicates that financial acquirers preferred targets with larger revenues, larger core profits and operational profitability. Regression analysis indicates that acquirer characteristics such as acquirer type and experience levels, and deal characteristics such as deal location and percentage of stake acquired influence deal size. However, target company information and performance supersede acquirer characteristics. The subprime crisis in 2008 was a minor deterrent in the acquisition activity for both financial buyers and strategic buyers resulting in larger value deals with targets with smaller revenues. Implications & Recommendations: This study provides insights into the importance and relevance of signals in PE-backed private company acquisitions by examining the characteristics of such acquisitions, the acquirer preferences, and the determinants of deal value. Private companies are less visible and less transparent as compared to public companies, making them obscure and difficult to value. Therefore, strategic acquirers and financial acquirers rely on signals to assess the viability of the potential target, with PE backing serving as a notable certification. This study indicates that PE-backing influences deal value and acquirer’s preferences. Despite the 2008 financial crisis influencing acquisition activity, both sets of acquirers were able to leverage their experiences into their respective acquisitions. Higher total and relevant experience seemed to work favourably for acquirers, who profited from increased bargaining power. Contribution & Value Added: Firstly, this study enriches and adds to the knowledge of the literature on acquisitions, particularly private company acquisitions and the role played by PE in the same. Next, this study adds to the literature on the subprime crisis and the impact of the crisis on acquisition activity. Further, this article provides insights into strategic decision-making by the two dominant acquirers- strategic acquirers, and financial acquirers- when they are limited by a target pool and the interpretation of signals by the target. Finally, the examination of PE-backed private company acquisitions adds to the study and practice of entrepreneurial finance by examining the role of PE as a signal to deal with quality to encourage acquisitions of privately held targets.
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Prédiction distillée sur la base complète
Imitation des enseignantsNi prévalence calibrée, ni vérité terrain. Validation humaine à venir. Apprise à partir de 10 348 étiquettes directes de Codex et de 10 348 étiquettes directes de Gemma. Le mode candidate est l'union des têtes enseignantes seuillées; le consensus est leur intersection. Ces sorties portent le statut machine_predicted_unvalidated et ne sont ni des étiquettes humaines ni des étiquettes directes de modèles de pointe.
Scores Codex et Gemma par catégorie
| Catégorie | Codex | Gemma |
|---|---|---|
| Métarecherche | 0,000 | 0,000 |
| Méta-épidémiologie (sens strict) | 0,000 | 0,000 |
| Méta-épidémiologie (sens large) | 0,001 | 0,000 |
| Bibliométrie | 0,000 | 0,000 |
| Études des sciences et des technologies | 0,000 | 0,000 |
| Communication savante | 0,000 | 0,001 |
| Science ouverte | 0,000 | 0,001 |
| Intégrité de la recherche | 0,000 | 0,000 |
| Charge utile insuffisante (le modèle a refusé de juger) | 0,000 | 0,000 |
Scores machine (provisoires)
Les deux têtes enseignantes du modèle étudiant, lues sur ce travail. Un score ordonne la base pour la relecture; il n'affirme jamais une catégorie, et le statut de validation accompagne chaque rangée tel quel.
Scores de référence d'un modèle non mature (critères de maturité non atteints, 7 itérations). Un score ordonne; il n'affirme jamais une catégorie.
score_only:v0-immature-baseline · tel quel depuis la passe de notation : score_only signifie que le nombre peut ordonner les travaux, et qu'aucune étiquette de catégorie n'en découleClassification
machine, non validéePrédiction automatique; un appel candidat d’une seule tête enseignante, pas un consensus.
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