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

Osborne, Sarah, Katselas, Dean and Chapple, Larelle (2012) The preferences of private equity investors in selecting target acquisitions: an international investigation. Australian Journal of Management, 37 3: 361-389. doi:10.1177/0312896212440269


Author Osborne, Sarah
Katselas, Dean
Chapple, Larelle
Title The preferences of private equity investors in selecting target acquisitions: an international investigation
Journal name Australian Journal of Management   Check publisher's open access policy
ISSN 0312-8962
1327-2020
Publication date 2012-12-01
Year available 2012
Sub-type Article (original research)
DOI 10.1177/0312896212440269
Open Access Status Not Open Access
Volume 37
Issue 3
Start page 361
End page 389
Total pages 29
Place of publication London, United Kingdom
Publisher Sage Publications
Language eng
Abstract 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.
Keyword Acquisition techniques
Economic cycles
Equity home bias
Legal origin
Mergers
Private equity
Regulatory environment
Tender offers
Q-Index Code C1
Q-Index Status Confirmed Code
Institutional Status UQ
Additional Notes Published online before print June 1, 2012

Document type: Journal Article
Sub-type: Article (original research)
Collections: Official 2013 Collection
UQ Business School Publications
 
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Citation counts: TR Web of Science Citation Count  Cited 3 times in Thomson Reuters Web of Science Article | Citations
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Created: Fri, 09 Nov 2012, 00:41:22 EST by Karen Morgan on behalf of UQ Business School