What drives leverage in leveraged buyouts? An analysis of European leveraged buyouts’ capital structure
De Maeseneire, Wouter Brinkhuis, Samantha
De Maeseneire, Wouter
Brinkhuis, Samantha
Citations
Altmetric:
Publication Type
Journal article
Editor
Supervisor
Publication Year
2012-10
Journal
Accounting and Finance
Book
Publication Volume
52
Publication Issue
s1
Publication Begin page
Publication End page
Publication Number of pages
Collections
Abstract
Abstract This paper examines leverage in European private equity‐led leveraged buyouts (LBOs). We use a unique, self‐constructed sample of 126 European private equity (PE)‐sponsored buyouts completed between June 2000 and June 2007. We find that determinants derived from classical capital structure theories do not explain leverage in LBOs, while they do drive leverage in a control group of comparable public firms. Rather, we document that leverage levels in LBOs are related to the prevailing conditions in the debt market. In addition, our results indicate that reputed private equity sponsors use more debt and that secondary buyouts have higher leverage levels.
Research Projects
Organizational Units
Journal Issue
Keywords
3501 Accounting, Auditing and Accountability, 3502 Banking, Finance and Investment, 35 Commerce, Management, Tourism and Services, 3507 Strategy, Management and Organisational Behaviour