Family Firm Buy-Outs, Private Equity and Strategic Change

16 Pages Posted: 12 Feb 2012

See all articles by Louise Scholes

Louise Scholes

Loughborough University London

Mike Wright

Nottingham University Business School

Paul Westhead

Durham University

Hans Bruining

Erasmus University Rotterdam (EUR) - Department of Strategic Management and Entrepreneurship; Erasmus Research Institute of Management (ERIM)

Oliver Kloeckner

Technische Universität München - Center for Entrepreneurial and Financial Studies

Date Written: January 7, 2009

Abstract

Management buy-outs (MBO) and buy-ins (MBI) represent an important succession option in family firms. They thus also provide an important deal source for private equity firms. Yet, while much attention in the private equity and buy-out market has been upon large public to private transactions, the family buy-out part of the market is not well-understood. In light of these issues, the purpose of this article is twofold: We provide an overview of developments in the family firm buy-out market. Specifically, we examine trends in the number and value of deals, deal sizes, share of the total buy-out market, employment and the role of private equity. We use CMBOR’s unique database comprising the population of 30,000 European buy-outs as the source for this analysis. We undertake a detailed study of strategic changes in family firms as a result of a buy-out. Specifically, we examine whether changes in the strategy of former private family firms affected by the ownership and governance of the firm before the buy-out. These issues are examined using a novel hand-collected representative questionnaire survey of 104 private family firms across Europe which had a buy-out funded by private equity between 1994 and 2003.

Keywords: family firm, buy-out, governance, ownership, strategic change

Suggested Citation

Scholes, Louise and Wright, Mike and Westhead, Paul and Bruining, Hans and Kloeckner, Oliver, Family Firm Buy-Outs, Private Equity and Strategic Change (January 7, 2009). Available at SSRN: https://ssrn.com/abstract=2002893 or http://dx.doi.org/10.2139/ssrn.2002893

Louise Scholes (Contact Author)

Loughborough University London ( email )

Here East
Queen Elizabeth Olympic Park
London, E15 2GZ
Great Britain

Mike Wright

Nottingham University Business School ( email )

Jubilee Campus
Wollaton Road
Nottingham, NG8 1BB
United Kingdom
+44 115 951 5257 (Phone)
+44 115 951 5204 (Fax)

Paul Westhead

Durham University ( email )

Old Elvet
Mill Hill Lane
Durham, Durham DH1 3HP
United Kingdom

Hans Bruining

Erasmus University Rotterdam (EUR) - Department of Strategic Management and Entrepreneurship ( email )

RSM Erasmus University
Rotterdam, 3000 DR
Netherlands

Erasmus Research Institute of Management (ERIM)

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Oliver Kloeckner

Technische Universität München - Center for Entrepreneurial and Financial Studies ( email )

Arcisstr. 21
Munich, 80333
Germany

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