668
edits
Changes
Jump to navigation
Jump to search
→LBO Traits/Incidence/Phenomena Papers
*FA/TA Financial assets (net)/Total Assets (net)
*TA/TAg Total Assets (net)/Total assets (gross)
===Kaplan 1991===
@article{kaplan1991staying,
title={The staying power of leveraged buyouts},
author={Kaplan, Steven N},
journal={Journal of Financial Economics},
volume={29},
number={2},
pages={287--313},
year={1991},
publisher={Elsevier}
abstract={This paper documents the organizational status over time of 183 large leveraged buyouts completed between 1979 and 1986. By August 1990, 62% of the LBOs are privately owned, 14% are independent public companies, and 24% are owned by other public companies. The percentage of LBOs returning to public ownership increases over time, with LBOs remaining private for a median time of 6.82 years. The majority of LBOs, therefore, are neither short-lived nor permanent. The moderate fraction of LBO assets owned by other companies implies that asset sales play a role, but are not the primary motivating force in LBO transactions.}
filename={Kaplan (1991) - The staying power of leveraged buyouts}
}
Implications for the reasons LBOs occur and sources of value in LBO transactions. Describes characteristics, timelines, and stats of LBOs that return to public ownership.
Data:
183 large leveraged buyouts between 1979 and 1986 collected from Securities Data corporation or Morgan Stanley and Company. Post-buyout info obtained from Lotus' Datext databases, Nexis database, Wall street journal articles the year the LBO was completed, and financial reports filed with the SEC
Variables:
*number of LBO's
*total debt to total capital (book value)
*total debt to initial deal value
*interest expense to operating income
*inside equity ownership fraction
===Roden & Lewellen 1995===
@article{roden1995corporate,
title={Corporate capital structure decisions: evidence from leveraged buyouts},
author={Roden, Dianne M and Lewellen, Wilbur G},
journal={Financial Management},
pages={76--87},
year={1995},
publisher={JSTOR}
abstract={ We analyze the composition of the financing packages used in a large sample of
leveraged buyout transactions in order to test a set of hypotheses developed in
the prior literature about the determinants of corporate capital structure decisions. We
focus in particular on the role of agency costs, bankruptcy risks, and tax
considerations. We find evidence that all three have an impact, both on the degree of
leverage employed in the transactions and on the attributes of the borrowings
undertaken. The impacts are manifest in systematic relationships between the
proportion and type of debt in the buyout financing package and the target firm's
earnings rate, earnings variability, growth prospects, and its tax and liquidity position}
filename={Roden and Lewellen (1995) - Corporate Capital Structure Decisions Evidence from Leveraged Buyouts}
}
Attempts to explain why observed financing choices were made by individual firms. Identifies relationships between the characteristics of the target firms and the types of financings that were employed in their acquistion. Evidence that LBO financing decisions appear systematically to be affected by the target firm's growth prospects, the level and variability of return on its assets, its pre-buyout liquidity position, and by tax considerations and post-buyout restructuring plans.
Data:
LBOs that took place in the ten-year period from 1981 to 1990. Annual lists published in Mergers and Acquisitions. Then SEC 10k, 8k or 14D filing. More balance sheet and income statement info from COMPUSTAT and Moody's. Final sample was 107 LBOs
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-firm earnings variability (EARNINGVAR)
*free cash flow ratio (FREECASH)
*acquisition premium paid (PREMIUM)
*trend variable (TIMEDUM)
Dependent variables:
*PBANKL the percentage 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 balances
=Innovation Factors/Phenomena Papers=
