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Plundered or profitably pumped-up? The effects of private equity takeover

Author

Listed:
  • Kärnä, Anders

    (Financial Stability Department, Central Bank of Sweden)

  • Myers, Samantha

    (Financial Stability Department, Central Bank of Sweden)

Abstract

We study the effects on firms that are acquired by private equity firms in a leveraged buyout, using detailed Swedish registry data covering 1998-2022. Acquired firms see a large increase in their debt and debt related variables, but no significant change in productivity. This suggests that, on average, private equity firms target profitable firms and increase their size through the addition of leverage.

Suggested Citation

  • Kärnä, Anders & Myers, Samantha, 2024. "Plundered or profitably pumped-up? The effects of private equity takeover," Working Paper Series 444, Sveriges Riksbank (Central Bank of Sweden).
    • Handle: RePEc:hhs:rbnkwp:0444
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Private Equity; LBOs; Firm Performance;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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