Pre-acquisition profile of privately held companies involved in takeovers: an empirical study
AbstractThis study addresses the pre-acquisition financial characteristics of privately held acquiring and acquired companies involved in 143 Belgian takeovers between 1992 and 1994. Specifically, the research examines the profitability, liquidity, financial structure, added value and failure risk using statistical analysis of industry-adjusted variables. Our findings show that acquisition is not an alternative to bankruptcy since acquired companies do not report high failure risk, but exhibit higher than industry liquidity and solvency. The acquirers achieve a higher growth rate in total assets and sales than the acquired firms but experience a negative industry-adjusted liquidity and are highly levered, suggesting evidence for a growth-resource mismatch or a financial fit between acquirers and their targets.
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Bibliographic InfoPaper provided by Vlerick Leuven Gent Management School in its series Vlerick Leuven Gent Management School Working Paper Series with number 2001-10.
Length: 57 pages
Date of creation: 02 Jan 2002
Date of revision:
Other versions of this item:
- Jan Camerlynck & Hubert Ooghe & Tine Langhe, 2005. "Pre-Acquisition Profile of Privately Held Companies Involved in Take-Overs: An Empirical Study," Small Business Economics, Springer, vol. 24(2), pages 169-186, 03.
- NEP-ACC-2002-12-09 (Accounting & Auditing)
- NEP-ALL-2002-12-09 (All new papers)
- NEP-COM-2002-12-09 (Industrial Competition)
- NEP-IND-2002-12-09 (Industrial Organization)
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- Isachenkova, N. & Weeks, M., 2008. "Acquisition, Insolvency and Managers in UK Small Companies," Cambridge Working Papers in Economics 0838, Faculty of Economics, University of Cambridge.
- Dionysios Polemis & Dimitrios Gounopoulos, 2012. "Prediction of distress and identification of potential M&As targets in UK," Managerial Finance, Emerald Group Publishing, vol. 38(11), pages 1085-1104, November.
- Hubert Ooghe & Elisabeth Laere & Tine Langhe, 2006. "Are Acquisitions Worthwhile? An Empirical Study of the Post-Acquisition Performance of Privately Held Belgian Companies," Small Business Economics, Springer, vol. 27(2), pages 223-243, October.
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