Yan Alperovych

Private equity firm experience and buyout vendor source: What is their impact on efficiency?

Using a dataset comprising 88 Private Equity (PE) backed Leveraged Buyouts (LBOs) completed and exited during the period 1999–2008, this study sheds new light on the impact of buyout vendor source and PE investor experience on post-buyout efficiency during the first 3years after the transaction. There are three main findings. First, we observe increases in post-buyout efficiency over time, although LBOs from different vendor source differ in terms of post-transaction efficiency levels and improvement trajectories. Private and divisional buyouts are more efficient than the average. Divisional buyouts show higher efficiency improvements than private and secondary buyouts. Secondary buyouts remain below the average. Second, multivariate analyses suggest a positive and significant effect of PE firm experience on post-buyout efficiency. Finally, the observed efficiency patterns seem to be convex, suggesting the major improvements happen in the first 2years after the transaction.

When Can Government Venture Capital Funds Bridge the Equity Gap

Several papers find that government venture capital funds do not add (much) value to their investees, underperform their private peers, or crowd out private investment. However, a major objective of public initiatives in the market for start-up financing is to “bridge the equity gap”. This paper addresses the conditions under which government venture capital funds may fulfill this mission in a best possible way. Our data reveals that the competitiveness of a region where a government venture capital fund is located strongly affects its success. Furthermore, potential collusion and regulatory capture detriment the success likelihood of GVC backed start-ups. Nevertheless, the preferable and most simple method to accomplish the mission is if GVC funds gain particular investee-industry experience and learn from their private peers in syndicated transactions.

M&A Rumors: Why Sellers Hate Them

We provide large sample evidence on the causes and consequences of takeover rumors. 55.2% of non-completed M&A deals involve rumors while only 17.3% of completed deals involve them. Probit-regressions reveal that rumors are deal-breakers, reducing the likelihood of deal completion by 37-41%. Simultaneous equations confirm this result even if rumors are not exogenous events but spread on purpose, e.g. in an attempt to prevent an M&A transaction, or if they are caused by unobservable effects. If a transactions still emerges even if rumored, then the rumor has destroyed

Bank Networks and Buyout Financing

7.8 million of value of the median M&A deal.

How does governmental versus private venture capital backing affect a firm's efficiency? Evidence from Belgium

We investigate whether syndication networks among banks influence the financing of leveraged buyouts (LBO). We find that lead banks serve as important intermediaries between the supply (banks in an LBO loan syndicate) and demand (targets and private equity (PE) firms) sides of LBO financing. They rely on their syndication network to reduce information asymmetries between the parties involved, especially when prior bank-borrower relationships are weak or non-existent. Banks that are more central within their network are more likely to be chosen as lead arrangers since they are able to form larger syndicates and provide more debt. In addition, more central banks are preferred as lead arrangers because their influential network position allows them to finance LBOs under terms that are favorable to both targets and PE firms. After controlling for the simultaneous determination of LBO financing terms, we find that a one-standard-deviation increase in bank centrality reduces LBO loan spreads by an average of 22 basis points, representing a 1.65% increase in PE equity returns for an average loan size of

Explaining returns on venture capital backed companies: Evidence from Belgium

363 million. These findings suggest that bank networks play a crucial role in facilitating LBO financing and that borrowers are able to perceive the relative position of banks within these syndication networks.