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2012/2 (Vol. 33)

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Pages 7 - 60 Next



This paper investigates the operating performance of French targets of Leveraged Buy-Out (LBO) transactions during the 1995-2005 period. To benchmark LBO performance, I use a propensity score methodology to find a suitable non-LBO matching pair. The study finds that after the deal, the representative LBO firm exhibits higher operating returns of 4% to 5% relative to its matching control. This finding seems mostly due to increased gross margins, productivity gains, and working capital efficiency gains. These findings are not particular to a certain type of targets and are unchanged if I use the industry of the LBO firm as a benchmark.


  1. Introduction
  2. Constructing the sample
  3. Methodology
    1. Measuring performance
    2. Obtaining the matched controls
    3. Hypothesis testing
  4. Results
    1. Summary statistics
    2. Performance results
    3. Decomposing performance
  5. Robustness checks
    1. Results across subsamples
    2. Results using the industry as a benchmark
  6. Impact on assets, wages, and employment
  7. Regression analysis
  8. Discussion
    1. Interpreting the findings
    2. Fit with existing empirical literature on the French market
    3. Caveats
  9. Conclusion

To cite this article

José-Miguel Gaspar, “ The Performance of French LBO Firms: New data and new results ”, Finance 2/2012 (Vol. 33) , p. 7-60
URL : www.cairn.info/revue-finance-2012-2-page-7.htm.

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