Secondary buy-outs mechanisms and performances: a quantitative analysis of operating efficiency,profitability and return on investment.

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Souliez, Harold G G (2010) Secondary buy-outs mechanisms and performances: a quantitative analysis of operating efficiency,profitability and return on investment. [Dissertation (University of Nottingham only)] (Unpublished)

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Abstract

In this paper we provide a description of secondary buy-outs mechanisms, and their evolution in regards to first round buy-outs. While some additional motives are identified, introducing the possibility of performance improvement through the change in ownership structure, we analyse the evolution of some performance indicators. We

scanned a 6,633 UK secondary buy-outs database between 2000 and August 2010, as to identify a 108-exited secondary buy-out sample (2000-2009 period). We find conclusive

evidence that operating performance, profitability and return on investment changes from first round buy-outs to secondary buy-outs are negative. However secondary buy-

outs still out-perform industry peers. Positive influence of private equity backing remains in secondary buy-outs. Nevertheless similar impact of private equity syndication is limited – it only seems to significantly increase resort to leverage. We also identified – in a limited extent – the negative first round buy-outs’ length relationship

and the positive secondary buy-outs’ length relationship with secondary buy-outs performance indicator. This suggests that exit through secondary buy-outs only takes

place if neither flotation nor trade sale are possible. In addition, the more time allowed for secondary buy-out mechanisms implementation, the greater operating performance and profitability improvements.

Item Type: Dissertation (University of Nottingham only)
Depositing User: EP, Services
Date Deposited: 19 Jan 2011 10:21
Last Modified: 21 Mar 2022 16:08
URI: https://eprints.nottingham.ac.uk/id/eprint/24122

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