Publicação
Private equity vs. strategic acquirers : who wins on the M&A game in the UK?
| Resumo: | This study investigates the post-deal performance of firms acquired by Private Equity versus Strategic Acquirers in the UK. We use a combination of counterfactual matching (controlling for self-selection) together with a differences-in-differences analysis to capture the marginal effect of Private Equity buyers and Strategic Acquirers towards their targets’ performance. For our sample of 56 Private Equity deals and 69 Strategic transactions, we do not find clear evidence that neither of both types of buyers outperforms the other in a broad extent. Notwithstanding, in measures related to profitability, such as the Gross Margin, our results suggest that Strategic Acquirers outperform Private Equity targets’ performance, which we attribute to higher synergy-related gains at a raw-material level, resulting from the complementarity between resources of both parties engaged in the transaction. Contrary evidence is found when analyzing efficiency gains and growth metrics, as our results suggest that Private Equity targets experience a higher decline in Working Capital-to-Sales, arising from better management practices, as well as superior Assets Growth, as a consequence of Private Equity’s role as a source of capital. |
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| Autores principais: | Silva, Miguel Lima Grilo Fernandes da |
| Assunto: | Private equity Strategic acquisitions Deal performance Capital de risco Aquisições estratégicas Desempenho da transação |
| Ano: | 2019 |
| País: | Portugal |
| Tipo de documento: | dissertação de mestrado |
| Tipo de acesso: | acesso aberto |
| Instituição associada: | Universidade Católica Portuguesa |
| Idioma: | inglês |
| Origem: | Veritati - Repositório Institucional da Universidade Católica Portuguesa |
| Resumo: | This study investigates the post-deal performance of firms acquired by Private Equity versus Strategic Acquirers in the UK. We use a combination of counterfactual matching (controlling for self-selection) together with a differences-in-differences analysis to capture the marginal effect of Private Equity buyers and Strategic Acquirers towards their targets’ performance. For our sample of 56 Private Equity deals and 69 Strategic transactions, we do not find clear evidence that neither of both types of buyers outperforms the other in a broad extent. Notwithstanding, in measures related to profitability, such as the Gross Margin, our results suggest that Strategic Acquirers outperform Private Equity targets’ performance, which we attribute to higher synergy-related gains at a raw-material level, resulting from the complementarity between resources of both parties engaged in the transaction. Contrary evidence is found when analyzing efficiency gains and growth metrics, as our results suggest that Private Equity targets experience a higher decline in Working Capital-to-Sales, arising from better management practices, as well as superior Assets Growth, as a consequence of Private Equity’s role as a source of capital. |
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