Publication Type

Journal Article

Publication Date

3-2011

Abstract

This paper studies the impact of buyout sponsors’ IPO timing on the LBO restructuring process and subsequent exit strategies. I find that LBO duration is negatively related to hot IPO market conditions. Further, following IPOs, RLBOs with shorter LBO duration experience greater deterioration of performance and higher probability of bankruptcy. This suggests that sponsor’s efforts to enhance operating efficiency succumb to market timing. IPO timing does not affect sponsor’s exit strategies and monitoring post IPO. Sponsors keep an active long-run presence with more reputable sponsors more likely to exit by facilitating takeovers.

Discipline

Portfolio and Security Analysis

Research Areas

Finance

Publication

Journal of Financial and Quantitative Analysis

Volume

46

Issue

4

First Page

1001

Last Page

1024

ISSN

0022-1090

Identifier

10.1017/S0022109011000160

Publisher

Cambridge University Press

Additional URL

http://dx.doi.org/10.1017/S0022109011000160

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