On 15 December 2007, Sammy Lasseel was facing an important decision that could change his life, but he had to act quickly. He joined Basic Textiles last year as CEO, with an option to buy the company within the year. The current shareholders have given him an ultimatum: Sammy had the opportunity to buy the company for 4 million euros, but he had to decide before Christmas. If he declined their proposal, he would be fired as CEO as from January 2008 onwards. Sammy first had to decide whether he was willing to pay 4 million euros for the shares. If so, how could he finance the takeover?
This note briefly describes some important performance measures that can be used in failure prediction research. We do not only give an overview of the measures, but also clarify the connections between them and illustrate their use with numerical examples.
While informed private equity (PE) investors screen for the most promising ventures, firms may avoid raising of PE for issues of cost and control. A critical question therefore is: which firms get PE? We consider both supply and demande side arguments to study the characteristics of a sample of 231 firms that did receive PE and compare them to those of a matched sample. Supporting the pecking order theory, we show that firms rely on PE funding when there are no alternatives, i.e.when their debt capacity is limited, due to financial and bankruptcy risk and due to important investments in intangibles. PE investors, from their side, select firms with substantial growth options. Further, firms that receive PE have grown more before the funding event than companies that did not receive PE. Keywords: financing choice, private equity JEL classification: G32
The export option will allow you to export the current search results of the entered query to a file. Different
formats are available for download. To export the items, click on the button corresponding with the preferred download format.
By default, clicking on the export buttons will result in a download of the allowed maximum amount of items.
To select a subset of the search results, click "Selective Export" button and make a selection of the items you want to export.
The amount of items that can be exported at once is similarly restricted as the full export.
After making a selection, click one of the export format buttons. The amount of items that will be exported is indicated in the bubble next to export format.