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The influence of private equity and venture capital on the post-IPO performance of newly-public acquirers
Matanova, Natalia Steigner, Tanja Sutton, Ninon Thompson, Linh
Matanova, Natalia
Steigner, Tanja
Sutton, Ninon
Thompson, Linh
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Publication Type
Journal article with impact factor
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Supervisor
Publication Year
2022
Journal
The North American Journal of Economics and Finance
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Publication Volume
59
Publication Issue
January
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Abstract
This paper examines the influence of private equity (PE) and venture capital (VC) ownership on the post-initial public offering (IPO) performance of newly-public acquirers. Our results show that acquirers with PE- or VC-backing at the time of the IPO perform better long-term than acquirers without such backing. More importantly, while acquirers without financial backing experience negative long-run returns from first-year acquisitions, acquirers with continued PE- and VC-backing perform significantly better when making acquisitions within the first year after going public. However, acquiring firms and investors should be aware that for mergers in the second and third year post-IPO, continued VC ownership has a detrimental long-term impact. In contrast, higher levels of continued PE ownership tend to have a positive relationship with long-run performance.
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Keywords
Private Equity, Venture Capital, IPO, M&A