The performance of majority MBOs: An investigation on European SMEs controlled by their managers

Nicolas Bedu () and Jean-Etienne Palard
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Jean-Etienne Palard: IRGO - Institut de Recherche en Gestion des Organisations - UB - Université de Bordeaux - Institut d'Administration des Entreprises (IAE) - Bordeaux

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Abstract: This article investigates the impact of a majority management buyout (majority MBO) on the evolution of growth, performance and the level of employment of European SMEs. The empirical study is based on an original sample of 178 majority MBOs in Europe over the 2000-2007 period that is the golden age of LBO in Europe. The results show opposite trends between targets companies in the UK and continental Europe. British targets exhibit higher performance and employment level unlike European companies for which the results are not statistically significant compared to the control sample. The results also indicate that divisional majority MBOs perform better than private-to-private acquisitions. However, the role of PE funds remains unclear to explain the post-buyout trends in terms of performance and employment.

Keywords: Management buyout (MBO); Private equity; Performance; Employment; Agency costs (search for similar items in EconPapers)
Date: 2021-03-15
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Published in Finance Contrôle Stratégie, 2021, 24-1, ⟨10.4000/fcs.7014⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03252342

DOI: 10.4000/fcs.7014

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