Showing articles with tag: leveraged buyouts
Private Equity and Taxes
We study companies’ tax avoidance behavior after being acquired in a private equity transaction. We find that target companies’ effective tax rate decreases by 16.14% relative to the unconditional mean. This finding is in line with the hypothesis that private equity investors create shareholder value by extracting money from the…
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Do Private Equity Firms Pay for Synergies?
It is a commonly accepted view that strategic acquirers incorporate synergistic value into their bids for targets, while private equity (PE) funds presumably do not because they lack operating similarities with the portfolio firm. Empirical evidence provides some support for this view but is limited to PE bids in so-called…
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