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How an IPO Helps in M&A

Author

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  • Ugur Celikyurt
  • Merih Sevilir
  • Anil Shivdasani

Abstract

An initial public offering (IPO) can often provide a powerful stimulus to private companies seeking to pursue an acquisition-driven growth strategy. Based on a comprehensive analysis of U.S. IPOs, the authors show that newly public companies are prolific acquirers. Over 30% of companies conducting an IPO make at least one acquisition in their IPO year, and the typical IPO firm makes about four acquisitions during its first five years as a public company. Copyright Copyright (c) 2010 Morgan Stanley.

Suggested Citation

  • Ugur Celikyurt & Merih Sevilir & Anil Shivdasani, 2010. "How an IPO Helps in M&A," Journal of Applied Corporate Finance, Morgan Stanley, vol. 22(2), pages 94-99.
  • Handle: RePEc:bla:jacrfn:v:22:y:2010:i:2:p:94-99
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    References listed on IDEAS

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    1. Luigi Zingales, 1995. "Insider Ownership and the Decision to Go Public," Review of Economic Studies, Oxford University Press, vol. 62(3), pages 425-448.
    2. Celikyurt, Ugur & Sevilir, Merih & Shivdasani, Anil, 2010. "Going public to acquire? The acquisition motive in IPOs," Journal of Financial Economics, Elsevier, vol. 96(3), pages 345-363, June.
    3. James C. Brau & Stanley E. Fawcett, 2006. "Initial Public Offerings: An Analysis of Theory and Practice," Journal of Finance, American Finance Association, vol. 61(1), pages 399-436, February.
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    Cited by:

    1. Reddy, K. Srinivasa, 2011. "The aftermarket pricing performance of initial public offers: Insights from India," MPRA Paper 62885, University Library of Munich, Germany, revised 2013.

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