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International conference

Corporate Restructuring, Leveraged Buyout and Voluntary Delisting: a Wisdom of Opportunities for Private Equity Investments

Analysing a comprehensive dataset of European going private deals during the period 1998–2007, we explore the post-transaction operating performance of companies gone private and potential variables that can explain this choice. We find these firms’ situations improved slightly before going private, even if the most relevant and significant benefits on operating performance appear in the short and medium term. We show that the presence of a private equity provider appears to positively affect long-term performance, especially when the target company is large and needs to embark on a complex restructuring process. We further analyse restructuring, providing some evidence that, for companies with complex turnaround plans, going private is a valid option for implementing their strategies more effectively away from the public eye. In particular, we also show that this is particularly relevant for smaller public firms that cannot afford to undertake such a process without the whole support of the market. Finally, we do not find any evidence that size is, per se, a factor that has any structural impact on post-deal performance.