Changes

Business RiskLBO factors/incidence:*CVTRGR Coefficient of variation of turnover growth computed on the 3 yearperiod preceding the dealLog assetsR&DOperating incomeSalesTaxLiquidityROA*CVROIC Coefficient of variation of ROIC computed on the 3 year-period preceding the deal*CVROE Coefficient of variation of ROE computed on the 3 year-period preceding the dealGrowthBook val per shareEarnings variability*CVFCFTakeover speculation/TR Coefficient of variation of FCF/turnover computed on the 3 yearperiod preceding the dealcompeting bidTobin's QIndustry dummies (probably 2 digit NAICS)

Composition and LBO characteristics of assets and financial structure:?*TanA/TA Tangible assets (net) divided by total assets (net)*LEV Total debt divided by stockholders equity*RET/TA Retained earnings/Total assets*NC/TA Net cash/Total assets*WCR/TR Working Capital Requirement divided by turnover*FA/TA Financial assets (net)/Total Assets (net)*TA/TAg Total Assets (net)/Total assets (gross) Variables: *Target-firm size (SIZE)*Target-firm liquidity (LIQUIDITY)*Asset sales subsequent to the lbo (ASSETSALE)*Target-firm return on assets (ROA)*Target-firm growth opportunities (GROWTH and MRKTBOOK)*target-Division or full firm earnings variability (EARNINGVAR)*free cash flow ratio (FREECASH)?*acquisition premium paid (PREMIUM) *trend variable (TIMEDUM) Dependent variables: *PBANKL the percentage breakdown of the total buyout financing package that is represented by senior bank debt*PDEBTSEC: the percentage of the total package that consists of issues of junior debt securities*PPREFER: the percentage of the total package represented by issues of preferred stock*PCOMMON: the percentage of the total that consists of common equity provided by the buyout group*PCASH: the percentage of the total that comes from the use of the target firm's existing cash and marketable securities balancespreferred equity  *CF = INC-TAX-INTEXP-PFDDIV-COMDIV*CF/EQUITY*Lagged SALESGR*TAX/EQUITY ===non-Compustat=== *FOOTSTEPS (=1 if competing bid or takeover speculation in WSJ)  *percentage non-executive directors*percentage independent directors*duality of CEO and chairman*percentage of shares held by CEO*percentage of shares held by non-CEO executive directors*percentage of shares held by institutions *free cash flow (operating cash flow minus interest, tax, dividends, deflated by sales) (cf. Kieschnick (1998) and Halpern et al. (1999)*speculation of takeover in financial press*Q ratio  *Operating income/assets*Tobin's Q*Machinery industry dummy*R&D/sales*Selling expenses/sales*Log(assets)*Diversification index*High cash flow, low Q*Low cash flow, high q*Diversified, low q  *number of LBO's *total senior debt to total capital (book value)*total junior debt to initial deal value*interest expense to operating income*inside equity ownership fraction  Variables:*Full LBO*Size*Industry Q*R&D/Sales ==Innovation=====Compustat======Non-Compustat===*Measures innovative activity with patents and new product announcements. *Measures firm performance with after tax ROA, sales growth 3-year moving average.*Controls for year and industry (two digit SIC code)*Does not control for firm size, since it is correlated with R&D spending.cash