Profitability of Serial Acquirers on the Polish Capital Market

Andrzej Rutkowski ()
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Andrzej Rutkowski: University of Warsaw

A chapter in Contemporary Trends and Challenges in Finance, 2018, pp 211-218 from Springer

Abstract: Abstract The research presented in the article aims to identify the effect of serial acquisitions on the financial management of purchasing companies. The research covered a total of 405 Warsaw Stock Exchange (WSE)-listed companies which were not financial institutions. The study group, i.e. the group of serial acquirers, comprised 93 companies which in the study period undertook four or more acquisitions. They accounted for 76% of the total number of transactions. The control group was made up of the remaining companies. The financial results of these two groups of companies were observed for the years 2002–2015. Rates of return on equity, return on assets, and capital market ratios, such as MV/BV and PE, were analysed for both groups, as were their asset growth rates and sales growth rates. The proposed hypotheses were tested by a two-sample t-test with unequal variances. The research conducted on the WSE shows that serial acquirers have a lower return on equity (ROE) and a lower return on total assets (ROA). The serial acquirers more quickly increase their assets and achieve a higher sales growth rate than the remaining companies. The capital market values their prospective achievable yield higher, thanks in part to their newly-acquired assets (MV/BV).

Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-319-76228-9_20

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DOI: 10.1007/978-3-319-76228-9_20

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