The preferences of private equity investors in selecting target acquisitions : an international investigation

Osborne, Sarah, Katselas, Dean, & Chapple, Larelle J. (2012) The preferences of private equity investors in selecting target acquisitions : an international investigation. Australian Journal of Management.

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This study investigates the characteristics and attributes that private equity investors prefer when selecting target acquisitions. These characteristics are examined against a matched sample of firms subject to corporate acquisitions via tender/merger offer during 2000-2009, across seven countries: Australia, Canada, the United Kingdom, the USA, France, Germany and Sweden. We show that firm-specific characteristics are more influential in target selection than external or institutional variables. In particular, private equity targets exhibit lower stock volatility and long-term growth prospects, are larger, and have greater abnormal operating income relative to tender/merger offer target firms. Further, private equity bidders exhibit 'home bias', implying that familiarity motivates target selection. Institutional factors remain largely insignificant across all tests.

Impact and interest:

2 citations in Scopus
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1 citations in Web of Science®

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ID Code: 55246
Item Type: Journal Article
Refereed: Yes
Additional Information: Published online before print June 1, 2012,
Keywords: Acquisition techniques, economic cycles, equity home bias, legal origin, mergers, private equity, regulatory environment, tender offers
DOI: 10.1177/0312896212440269
ISSN: 1327-2020
Subjects: Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000)
Divisions: Current > Research Centres > Australian Centre for Philanthropy and Nonprofit Studies
Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Accountancy
Copyright Owner: Copyright 2012 SAGE Publications
Deposited On: 11 Dec 2012 22:04
Last Modified: 05 Oct 2013 22:42

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