Rethinking Target’s Private Equity Process in Turnaround Situations
Giuseppe Tardivo,
Milena Viassone,
Marco Vulpiani
Issue:
Volume 3, Issue 3, June 2014
Pages:
42-50
Received:
28 August 2014
Accepted:
10 September 2014
Published:
20 September 2014
Abstract: Given the increasing role of PE investments in restructuring the trend of acquisitions, its process needs an organizational change in order to cope with crisis situations. Despite several papers have emphasized the important role of PE both in M&A transactions and in turnaround situations no research crosses these two aspects. This paper bridge this gap, proposing a rethinking of the target’s PE Process in turnaround situations creating value for the target and preparing it for the takeover. This purpose is achieved throughout a literature review and the description of a new PE process throughout the paradigmatic case study of the sport company Brown Ltd. Finally corrective actions are implemented. Results show how a turnaround situation needs a new PE process, developed in 3 main phases (crisis analysis, recover and development) through which it creates value for the target. Main limits consist in the application of the new PE process to a single case study and the lack of an empirical support able to generalize it. The findings help identify drawbacks and set an agenda for future work. This new process could be tested also on other industries and firms of different size, providing a practical adaptation of the PE process in crisis situations and adopted by consulting agencies after testing also its effects in the long term.
Abstract: Given the increasing role of PE investments in restructuring the trend of acquisitions, its process needs an organizational change in order to cope with crisis situations. Despite several papers have emphasized the important role of PE both in M&A transactions and in turnaround situations no research crosses these two aspects. This paper bridge thi...
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The Macroeconomic and Environmental Determinants of Private Equity in Emerging Asia Market: The Application of Extreme Bounds Analysis
Issue:
Volume 3, Issue 3, June 2014
Pages:
51-60
Received:
5 September 2014
Accepted:
15 September 2014
Published:
30 September 2014
Abstract: There is a great debate on the significance of the stable economic and well structure legal system on the commercialization, innovation and employment in modern economies. Private equity activities play a significant role in these three aspects. The purpose of this work is to investigate the macroeconomic and environmental determinants of private equity investment in nine major Asian countries. The estimations are based on a data set running from 2004 to 2013. Applying robust estimation techniques Extreme Bounds Analysis, this work identifies growth in domestic product growth, corporation tax rate, disclosure index and investors’ protection index as 'robust' set of determinants of private equity. Also, inflation, stock market value, property right index, legal costs, lending rate and time in days to start business as likely robust. The result suggests the need to enhance business confidence in the country not only through robust monetary and fiscal policy but also legal system.
Abstract: There is a great debate on the significance of the stable economic and well structure legal system on the commercialization, innovation and employment in modern economies. Private equity activities play a significant role in these three aspects. The purpose of this work is to investigate the macroeconomic and environmental determinants of private e...
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