Private equity firm experience and buyout vendor source: What is their impact on efficiency?

Yan Alperovych, Kevin Amess () and Mike Wright

European Journal of Operational Research, 2013, vol. 228, issue 3, 601-611

Abstract: 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 3years after the transaction. There are three main findings. First, we observe increases in post-buyout efficiency over time, although LBOs from different vendor source differ in terms of post-transaction efficiency levels and improvement trajectories. Private and divisional buyouts are more efficient than the average. Divisional buyouts show higher efficiency improvements than private and secondary buyouts. Secondary buyouts remain below the average. Second, multivariate analyses suggest a positive and significant effect of PE firm experience on post-buyout efficiency. Finally, the observed efficiency patterns seem to be convex, suggesting the major improvements happen in the first 2years after the transaction.

Keywords: Dynamic data envelopment analysis; Private equity; Management buyouts; Divisional private and secondary buyouts; Efficiency (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (9)

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Related works:
Working Paper: Private equity firm experience and buyout vendor source: What is their impact on efficiency? (2013)
Working Paper: Private Equity Firm Experience and Buy-out Vendor Source: What is their Impact on Efficiency? (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:228:y:2013:i:3:p:601-611

DOI: 10.1016/j.ejor.2013.01.019

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