Publications

January 2019
Article

Pay Now or Pay Later? The Economics within the Private Equity Partnership

By: Victoria Ivashina and Josh Lerner

The economics of partnerships have been of enduring interest to economists, but many issues regarding intergenerational conflicts and their impact on the continuity of these organizations remain unclear. We examine 717 private equity partnerships and show that (a) the... View Details

Keywords: Partnerships; Leveraged Buyout; Partners and Partnerships; Private Equity; Venture Capital; Leveraged Buyouts

SSRN

April 2008 (Revised December 2008)
Case

Leveraged Loans 2007

By: Andre F. Perold and Erik Stafford

The leveraged loan market was in a crisis during the summer of 2007, following many years of low realized volatility (less than 4% per annum), an index of leveraged loans had fallen over 5% in the month of July. A sudden drop in capital market prices for an asset class... View Details

Keywords: History; Financial Liquidity; Investment; Financial Crisis; Market Transactions; Disruption; Decision Choices and Conditions; Competitive Strategy; Capital Markets; Crisis Management; Commercial Banking; Banking Industry; Financial Services Industry

13 Jan 2020
Research & Ideas

Do Private Equity Buyouts Get a Bad Rap?

of the changes in jobs and wages.” Research lacking Despite such fears, there has been little concrete analysis of the impact private equity buyouts cause. In part, that’s because the financial transactions... View Details

Keywords: by Michael Blanding; Financial Services; Banking

July 1994 (Revised July 1995)
Case

VeriFone: The Transaction Automation Company (A)

By: Richard L. Nolan, Donna B. Stoddard and Hossam Galal

Describes VeriFone's new organizational model and its role in catapulting VeriFone to a market leadership position. Examines the impact of information technology and information access on the ability to leverage global resources, market responsiveness, and... View Details

Keywords: Leading Change; Leadership Development; Market Transactions; Information Technology; Organizational Design; Knowledge Use and Leverage; Organizational Structure; Information Management; Information Technology Industry

March 1997
Article

Transactions Costs and Capital Structure Choice: Evidence from Financially Distressed Firms

By: S. C. Gilson

This study provides evidence that transactions costs discourage debt reductions by financially distressed firms when they restructure their debt out of court. As a result, these firms remain highly leveraged and one-in-three subsequently experience financial distress.... View Details

Keywords: Cost; Capital Structure; Decision Choices and Conditions; Information; Finance; Business Ventures

Read Now

June 2007 (Revised July 2008)
Case

Kinder Morgan, Inc. - Management Buyout

Kinder Morgan, Inc., was a leader in the transportation and distribution of energy throughout North America, managing a master limited partnership with over $35 billion in infrastructure assets. In the summer of 2006, Richard Kinder, the founder and chairman of Kinder... View Details

Keywords: Leveraged Buyouts; Fairness; Governing and Advisory Boards; Privatization; Partners and Partnerships; Conflict of Interests; North America

June 1997
Case

VeriFone: The Transaction Automation Company (A) Abridged

By: F. Warren McFarlan

Describes VeriFone's new organizational model and its role in catapulting VeriFone to a market leadership position. Examines the impact of information technology and information access on the ability to leverage global resources, market responsiveness, and... View Details

Keywords: Information Technology; Organizational Structure; Globalized Markets and Industries; Information Management; Strategic Planning; Resource Allocation; Leadership Development; Information Technology Industry

April 2006 (Revised April 2012)
Background Note

The Role of Private Equity Firms in Merger and Acquisition Transactions

By: William E. Fruhan Jr.

Explores the importance of private equity firms in merger and acquisitions activity around the globe. In many countries, these firms now account for one quarter of the total merger and acquisition activity of all firms. The larger private equity firms generate fees for... View Details

Keywords: Leveraged Buyouts; Mergers and Acquisitions; Private Equity; Investment Funds; Value Creation

2024
Working Paper

Primary Capital Market Transactions and Index Funds

By: Marco Sammon and Chris Murray

We document the effects of mechanical buying by CRSP-index-tracking funds on post-IPO returns and IPO deal structure. Leveraging a difference-in-differences-style design built on a 2017 CRSP rule change, we find that expected index fund demand leads fast track IPOs to... View Details

Keywords: Investment Funds; Initial Public Offering; Investment Return; Price; Market Transactions; Financial Markets

SSRN

November 2017
Teaching Note

The Carlyle Group and Axalta

By: Josh Lerner and Alexey Tuzikov

Teaching Note for HBS No. 818-040. View Details

Keywords: Private Equity; Carlyle; Axalta; LBO; Leveraged Buyout

January 2004
Case

Bob Holgrom and the Buyout of the Carlson Division

By: Thomas R. Piper

The head of the Carlson Division stands to benefit substantially in financial terms if a private equity firm wins the bid for the division. The division is in the early stages of a performance turnaround, with only three quarters of profit improvement and no audited... View Details

Keywords: Private Equity; Leveraged Buyouts; Corporate Disclosure; Ethics; Financial Reporting; Laws and Statutes; Performance Improvement

Article

Analysts and Information Gaps: Lessons From the UAL Buyout

By: S. C. Gilson

Keywords: Information; Learning; Leveraged Buyouts

January 2017 (Revised August 2017)
Case

Earl Gordon - Eastern Circle

By: Steven Rogers and Greg White

This case follows an African-American entrepreneur through the process of sourcing a potential acquisition, valuing a company, and securing the funding to purchase the company. This entrepreneur must decide if he should close the deal and which financing term sheet to... View Details

October 2019 (Revised December 2019)
Case

BC Partners: Acuris

By: Victoria Ivashina and Terrence Shu

This case follows Nikos Stathopoulos, Managing Partner of BC Partners, as he and his team evaluate the potential sale of one of BC Partners’ portfolio companies, Acuris. Acuris was a global financial intelligence, news, and data company that had been acquired by BC... View Details

Keywords: Fund Management; Fund Raising; Leveraged Buyout; Buyout; Portfolio Management; Operations Improvement; Exit; Exit Strategy; Valuation Ratios; Finance; Private Equity; Leveraged Buyouts; Operations; Performance Improvement; Acquisition; Valuation

May–June 1995
Article

Rehabilitating the Leveraged Buyout: A Look at Clayton, Dubilier and Rice

By: W. C. Kester and T. A. Luehrman

Keywords: Leveraged Buyouts; Information

October 2012
Case

Winfield Refuse Management, Inc.: Raising Debt vs. Equity

By: W. Carl Kester and Sunru Yong

A small, publicly traded company specializing in non-hazardous waste management considers a major acquisition in the Midwestern U.S. The acquisition can provide entry into the region, help the firm compete in a competitive industry, and improve its cost position. The... View Details

Keywords: United States; Acquisitions; Capital Structure; Equity Capital; Debt Management; Expansion; Leveraged Buyouts; Financial Analysis; Administrative/Support/Waste Management/Remediation Services; Equity; Borrowing and Debt; Service Industry

1992
Chapter

Organizational Changes and Value Creation in Leveraged Buyouts: The Case of O.M. Scott & Sons Company

By: George P. Baker and Karen H. Wruck

Keywords: Leveraged Buyouts; Organizational Change and Adaptation; Value Creation

December 1989
Article

Organizational Changes and Value Creation in Leveraged Buyouts: The Case of O.M. Scott & Sons Company

By: George P. Baker and Karen Wruck

Keywords: Change; Value; Borrowing and Debt; Financial Instruments; Leveraged Buyouts

May 2015
Case

Venture Republic, 2011

By: W. Carl Kester and Mayuka Yamazaki

In December 2011, the founders of Venture Republic, a Japanese developer and operator of on-line search engines for shopping and travel, faced a decison about whether or not to take the company private in a management buyout transaction just three years after an... View Details

Keywords: Management Buyout; MBO; Valuation Methodologies; Financing Decisions; Conflicts Of Interest; Governance; Japan; Search Engines; Going Private; Conflict of Interests; Internet and the Web; Valuation; Privatization; Financing and Loans; Corporate Governance; Web Services Industry; Japan