The Performance of Reverse Leveraged Buyouts / Jerry Cao, Josh Lerner.

Format:

Book

Author/Creator:

Cao, Jerry.

Contributor:

National Bureau of Economic Research.

Lerner, Josh.

Series:

Working Paper Series (National Bureau of Economic Research) no. w12626.

NBER working paper series no. w12626

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2006.

Summary:

Reverse leveraged buyouts (RLBOs) have received increased public scrutiny but attracted little systematic study. We collect a comprehensive sample of 496 RLBOs between 1980 and 2002 and examine three- and five-year stock performance of these offerings. RLBOs appear to consistently outperform other IPOs and the stock market as a whole, with economically and statistically meaningful positive returns. There is no evidence of a deterioration of returns over time, despite the growth of the buyout market: RLBOs performed strongly in the late 1980s, the mid-1990s, and the 2000s. Large RLBOs that are backed by private equity firms with more capital under management perform better. We also find the so-called quick flips--when private equity firms sell off an investment within a year after acquisition--underperform.

Notes:

Print version record

October 2006.