The influence of private equity and venture capital on the post-IPO performance of newly-public acquirers
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Publication type
Journal article with impact factorPublication Year
2022Journal
The North American Journal of Economics and FinancePublication Volume
59
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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.Knowledge Domain/Industry
Accounting & Financeae974a485f413a2113503eed53cd6c53
10.1016/j.najef.2021.101597