The Performance of Private Equity-Backed Initial Public Offerings in Germany
51 Pages Posted: 7 Apr 2008 Last revised: 9 Dec 2014
Date Written: December 12, 2007
This paper investigates the long-term stock price performance of initial public offering (IPO) firms in Germany that were previously owned by private equity (PE) funds. A sample of 138 PE-backed IPOs (33 buyout- and 105 venture-backed) and 383 non-PE-backed IPOs between 1990 and 2007 is analysed for the long-term performance of these offerings. The analysis suggests that PE-backed IPOs outperform the stock market over the three-year term. On a risk-adjusted basis, returns are positive over a five-year post-IPO period. Within the PE-backed sample, venture capital-backed IPOs outperform buyout-backed offerings.
Keywords: initial public offerings (IPOs), private equity, leveraged buyouts (LBOs), venture capital (VC), reverse leveraged buyouts (RBLOs), stock price performance, long-term event study, Germany
JEL Classification: G12, G14, G15, G24
Suggested Citation: Suggested Citation