Plundered or profitably pumped-up? The effects of private equity takeover

Anders Kärnä and Samantha Myers

Economics Letters, 2025, vol. 247, issue C

Abstract: We study the effects on firms that are acquired by private equity firms in a leveraged buyout, using detailed Swedish registry data covering 1998-2022. Acquired firms see a large increase in their debt and debt related variables, but no significant change in productivity. This suggests that, on average, private equity firms target profitable firms and increase their size through the addition of leverage.

Keywords: Private equity; LBOs; Firm performance (search for similar items in EconPapers)
JEL-codes: G34 L25 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:247:y:2025:i:c:s016517652400538x

DOI: 10.1016/j.econlet.2024.112054

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