The focus of this empirical paper is to outline and evaluate certain determinants of lever-aged buyouts (LBOs) in Europe. The paper begins by providing a detailed description of LBOs, with particular emphasis on the European markets. This allows for the development of the four determinants that are studied in greater detail, specifically interest rate, out-standing stock, anti-director rights, and creditor rights. The conclusions indicate that coun-tries with more outstanding stock have larger LBO markets since equity is more liquid in these countries. Further, the results suggest that long-run interest rate is negatively related to the size of the LBO market. The paper goes on to test whether anti-director rights and creditor rights, as developed by La Porta et al. (1998) are related to the size of the LBO markets, but no evidence is found to support this notion. It is thus concluded that deter-minants focused on financing the buyouts play the most significant role in European LBO transactions.

<p>The focus of this empirical paper is to outline and evaluate certain determinants of lever-aged buyouts (LBOs) in Europe. The paper begins by providing a detailed description of LBOs, with particular emphasis on the European markets. This allows for the development of the four determinants that are studied in greater detail, specifically interest rate, out-standing stock, anti-director rights, and creditor rights. The conclusions indicate that coun-tries with more outstanding stock have larger LBO markets since equity is more liquid in these countries. Further, the results suggest that long-run interest rate is negatively related to the size of the LBO market. The paper goes on to test whether anti-director rights and creditor rights, as developed by La Porta et al. (1998) are related to the size of the LBO markets, but no evidence is found to support this notion. It is thus concluded that deter-minants focused on financing the buyouts play the most significant role in European LBO transactions.</p>

This cumulative dissertation aims to complement existing literature with insights on two topics gaining strong importance in the Private Equity Industry: 1) cross-border investments and 2) co-investments with portfolio firm management in times of uncertainty. Results in paper on cross-border investments suggest that the physical presence of a local office of PE firms can actually make a difference for foreign investments. With a local office, operating performance of PE firms is higher after the buyouts. Local offices are especially beneficial for performance the higher the perceived foreignness between PE firm and portfolio firm is. In addition, PE firms increase deal flow after a local office opening, do less syndicates and have higher deal volumes. Respective results imply it is worth in future research to differentiate between pure cross-border deals and deals operated through a local office. The forth paper sheds light on the positive relationship between management buyouts (MBOs) and economic policy uncertainty. Analyses indicate that access to information is a relevant channel for higher propensity of MBOs in uncertain times.:1 Introduction 1.1 Trends in private equity industry 1.2 Overview of essays 2 The Cross-Border Buyout Next Door 2.1 Introduction 2.2 Theoretical background 2.3 Data 2.4 Operating performance results 2.5 Insights from semi-structured interviews 2.6 Conclusion 3 Opening a Local Office - PE Firms' Engine for International Expansion? 3.1 Introduction 3.2 Theoretical background 3.3 Sample and data 3.4 Determinants of office openings 3.5 Impact of local offices 3.6 Conclusion 3.A Appendices 4 Entrepreneurial Activity in Times of Uncertainty: The Case of Management Buyouts 4.1 Introduction 4.2 Literature review and hypotheses 4.3 Material and methods 4.4 Results and discussion 4.5 Conclusions 4.A Appendices References

Obey the Law and Do a Little Bit Extra? The paper provides evidence on how firms’ stakeholder orientation is associated with standard measures of corporate governance using a panel of 1778 US companies during the period of 1995-2006. We construct two binary indicators, one measuring stakeholder hostility and the other stakeholder friendliness using data from KLD ratings agency. Based on these indicators, we classify firms into four groups representing stakeholder hostile, neutral, friendly and ”friendly and hostile” firms. Our results show that both stakeholder friendly and hostile firms tend to have significantly lower insider ownership, smaller option grants, lower pay-performance sensitivities, larger boards, older executive officers and directors, lower institutional ownership and larger number of anti-takeover defenses than the firms in the neutral group. We also find that the probability of stakeholder hostile activity is positively related to the strength of corporate governance, but the effect is insignificant except in local and global community areas. A possible explanation is that in these areas stakeholders are protected mainly by ethics and social norms rather than by various regulations that is commonplace in labour, environment and customer related areas. These findings lend support for the idea that stakeholders are best protected by various regulations. Corporate Governance and Workplace Safety. This paper examines how the weakening in corporate governance affects workplace safety. We use anti-takeover laws in the US in the 1980s as a source of variation in corporate governance. Our measures of workplace safety are the number of violations of OSHA workplace safety regulation, penalties paid for these violations, the number of accidents and employees’ complaints about their workplace safety. We find that firms affected by the regulation presented significantly more workplace safety violations and penalties than otherwise similar firms that were not affected by the regulation. Accidents and complaints tend to decrease as a result of the anti-takeover regulation, but the results are not entirely robust. We also document that the increase in workplace safety violations was significantly smaller in unionized firms. This suggests that unions can play an important role in curbing managerial discretion. How Responsible is Private Equity? The financial success of leveraged buyout targets (LBOs) is frequently associated with deteriorating conditions for other stakeholders, such as workers, customers, suppliers, tax-payers and society as a whole. We obtain a comprehensive set of stakeholder ratings for a sample of 373 LBOs and examine the pre-and post-LBO performance of these ratings. LBO targets are characterized by weak stakeholder relations across a number of measures compared to their peers, in terms of corporate governance, transparency, employee relations and community relations. Controlling for this selection, we do not find systematic evidence in favor of the idea that private equity funds gain at the expense of other stakeholders. Private equity ownership alters targets in the direction of higher pay, improved work-life benefits, increased charitable giving, and decreased concerns related to retirement benefits, adverse economic impact, tax disputes, unfair marketing practices and antitrust problems. / Diss. Stockholm : Handelshögskolan, 2010; Sammanfattning jämte 3 uppsatser.

This thesis focuses on specification of key characteristics and principles of private equity and includes specification of both the local market and the international market trends. Furthermore this paper defines institutional framework for support of private equity in the Czech Republic and specifies the history and operations of leveraged buyouts including description of leverage effect and its illustration. The leverage effect arises when combination of debt and equity is used for financing. Private equity transactions are characterized by uniqueness and this paper describes the investment process starting from the identification of investment opportunity through monitoring to exit. Analysis and definition of key characteristics of target companies is also included.

Bakgrund: I slutet av åttiotalet blev leveraged buyouts, högt belånade företagsuppköp, ett frekvent förekommande företeelse i Amerikanskt näringsliv. Det gigantiska uppköpet av RJR Nabisco är fortfarande omtalat bland världens investerare. Det senaste årtiondet har mängden kapital i private equity fonderna ökat till att idag motsvara ett kapital på runt 7% av Stockholmsbörsens värde. Samtidigt som dessa fonder kontrollerar en stor mängd kapital är det relativt okänt hur de sköter och tillför värde till sina portföljbolag. Syfte: Syftet med denna uppsats är att analysera hur private equity bolag tillför värde till sina svenska portföljbolag. Metod: Denna uppsats har utgått från en kvalitativ studie för en mer genomgående och djup analys av private equity marknaden. Författarna har valt att genomföra intervjuer med personer i ledande positioner hos portfölj bolagen. Totalt deltog sex stycken företag i studien. Eftersom vissa delar av informationen som insamlats kan anses vara av känslig karaktär så är alla företag anonyma. Slutsatser: Författarna kunde urskilja tre områden där private equity bolagen skapade värde i sina portföljbolag, genom förbättrade marginaler, ökad försäljning och minskade skulder. Private equity bolagen använde olika metoder för att skapa värde inom dessa områden, ett sätt är att ge ledningen i portföljbolagen ökade incitament, ett annat är att skapa strikta återbetalningsplaner för portföljbolagen vilket tvingar dem att effektivisera verksamheten. Private equity bolagen fungerar även som bollplank och assisterar vid förvärv. / Background: Through the late eighties leveraged buyouts were frequent in America and the giant buyout of RJR Nabisco became world renowned among investors. In the last decade the capital committed to private equity and leveraged buyouts have risen and in Sweden an amount equal to 7% of the market capitalization on the Stockholm stock exchange is placed in private equity funds. Although Private Equity firms control large amounts of capital it is relatively unclear how the private equity firms manage and add value to their portfolio companies. Purpose: The purpose of this thesis is to analyze how private equity firms contribute to their portfolio companies in Sweden. Methodology: This thesis has taken a qualitative approach for more in depth analysis of the private equity market. The authors have chosen to interview man-agers at portfolio companies acquired by private equity firms to gather data. Six portfolio companies participated in this study and the interviews were performed in a semi structured manner. As some of the information gathered could be of sensitive nature all respondents are anonymous. Conclusion: The authors identified three areas in which the private equity firms added value; improving the margins, increasing the turnover and reducing the debt. The private equity firms used different techniques to accomplish the value improvements, both by giving the executives at the portfolio companies incentives and by forcing them to increase the efficiency in the organisation in order to be able to repay debts. The private equity firms also supports their portfolio companies by giving assistance and support in i.e. acquisitions.

<p>Bakgrund: I slutet av åttiotalet blev leveraged buyouts, högt belånade företagsuppköp, ett frekvent förekommande företeelse i Amerikanskt näringsliv. Det gigantiska uppköpet av RJR Nabisco är fortfarande omtalat bland världens investerare. Det senaste årtiondet har mängden kapital i private equity fonderna ökat till att idag motsvara ett kapital på runt 7% av Stockholmsbörsens värde. Samtidigt som dessa fonder kontrollerar en stor mängd kapital är det relativt okänt hur de sköter och tillför värde till sina portföljbolag.</p><p>Syfte: Syftet med denna uppsats är att analysera hur private equity bolag tillför värde till sina svenska portföljbolag.</p><p>Metod: Denna uppsats har utgått från en kvalitativ studie för en mer genomgående och djup analys av private equity marknaden. Författarna har valt att genomföra intervjuer med personer i ledande positioner hos portfölj bolagen. Totalt deltog sex stycken företag i studien. Eftersom vissa delar av informationen som insamlats kan anses vara av känslig karaktär så är alla företag anonyma.</p><p>Slutsatser: Författarna kunde urskilja tre områden där private equity bolagen skapade värde i sina portföljbolag, genom förbättrade marginaler, ökad försäljning och minskade skulder. Private equity bolagen använde olika metoder för att skapa värde inom dessa områden, ett sätt är att ge ledningen i portföljbolagen ökade incitament, ett annat är att skapa strikta återbetalningsplaner för portföljbolagen vilket tvingar dem att effektivisera verksamheten. Private equity bolagen fungerar även som bollplank och assisterar vid förvärv.</p> / <p>Background: Through the late eighties leveraged buyouts were frequent in America and the giant buyout of RJR Nabisco became world renowned among investors. In the last decade the capital committed to private equity and leveraged buyouts have risen and in Sweden an amount equal to 7% of the market capitalization on the Stockholm stock exchange is placed in private equity funds. Although Private Equity firms control large amounts of capital it is relatively unclear how the private equity firms manage and add value to their portfolio companies.</p><p>Purpose: The purpose of this thesis is to analyze how private equity firms contribute to their portfolio companies in Sweden.</p><p>Methodology: This thesis has taken a qualitative approach for more in depth analysis of the private equity market. The authors have chosen to interview man-agers at portfolio companies acquired by private equity firms to gather data. Six portfolio companies participated in this study and the interviews were performed in a semi structured manner. As some of the information gathered could be of sensitive nature all respondents are anonymous.</p><p>Conclusion: The authors identified three areas in which the private equity firms added value; improving the margins, increasing the turnover and reducing the debt. The private equity firms used different techniques to accomplish the value improvements, both by giving the executives at the portfolio companies incentives and by forcing them to increase the efficiency in the organisation in order to be able to repay debts. The private equity firms also supports their portfolio companies by giving assistance and support in i.e. acquisitions.</p>

China's different economic environment, government infrastructure, and legal system might cause different management buyout procedures and results from management buyout procedures in the United States. Management buyout was originally created to increase efficiency and reduce agency cost in the United States in the 1960s; but management buyout in China is merely a tool to provide incentive programs for current management teams and reduce state-owned corporate shares.

This research has investigated the long-run performance of corporate restructurings through unbundling transactions on the JSE between 2000 and 2012. The corporate unbundling transactions considered by the research are spin-offs and sell-offs. From the two unbundling transactions, four samples were derived, that is, 21 spin-offs, 14 parent-spin-offs, 14 sell-offs and 20 parent-sell-offs. The share price performance of these samples was investigated by a matching firm methodology under the buy and hold abnormal returns. The research found that positive abnormal returns are present for both samples for up to four years after unbundling. Secondly, with the exception of parent-sell-offs, significant abnormal returns were experienced by both samples for up to four years after unbundling. It was also found that a spin-off is a preferable corporate unbundling strategy to a sell-off over a long-run period. This research implies that companies with heavy structures should unbundle in order to unlock shareholders’ value. / Business Management / M. Com. (Business Management)