IDEAS home Printed from https://ideas.repec.org/p/cdl/anderf/qt42w492j6.html
   My bibliography  Save this paper

The Characteristics of Leveraged Buyout Firms

Author

Listed:
  • Opler, Tim
  • Titman, Sheridan

Abstract

This paper investigates the determinants of leveraged buyout (LBO)activity by comparing firms that have implemented LBOs to those that have not. The analysis considers sources of gains from LBOs as well as the costs that can arise from the large amount of debt included in their financial strutures. Consitent with the free cash flowe theory we find that firms that initiate LBOs can be characterized as having a combination of unfavorable investment opportunities (low Tobin's q) and relatively high cash flow. In addion, firms likely to have high costs of financial distress (e.g. firms with high R&D expenditures), are less likely to do LBOs.

Suggested Citation

  • Opler, Tim & Titman, Sheridan, 1991. "The Characteristics of Leveraged Buyout Firms," University of California at Los Angeles, Anderson Graduate School of Management qt42w492j6, Anderson Graduate School of Management, UCLA.
    • Handle: RePEc:cdl:anderf:qt42w492j6
    as

    Download full text from publisher

    File URL: https://www.escholarship.org/uc/item/42w492j6.pdf;origin=repeccitec
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Reddy, Kotapati Srinivasa, 2015. "Market for Corporate Control and Contractual Buyout (CoBO): A New “Collective Ownership-and-Administrative” Strategy," MPRA Paper 63937, University Library of Munich, Germany, revised 2015.
    2. K.S. Reddy & En Xie & Yuanyuan Huang, 2016. "Contractual buyout - a legitimate growth model in the enterprise development: foundations and implications," International Journal of Management and Enterprise Development, Inderscience Enterprises Ltd, vol. 15(1), pages 1-23.
    3. Dasilas, Apostolos & Grose, Chris, 2018. "The wealth effects of public-to-private LBOs: Evidence from Europe," International Review of Financial Analysis, Elsevier, vol. 58(C), pages 179-194.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cdl:anderf:qt42w492j6. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Lisa Schiff (email available below). General contact details of provider: https://edirc.repec.org/data/aguclus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.