Private Equity in Family Firms: A Report on Private Equity Investments in Family Firms Across Europe
53 Pages Posted: 11 Feb 2012
Date Written: June 1, 2008
The European private equity market (management buy-outs and buy-ins) has grown in prominence over recent years with CMBOR figures showing the numbers of deals conducted rising from 1212 in 1998 to 1436 by the end of 2007. One of the most important features of this market has been the growth in buy-outs of family/private firms from 451 in 1998 to 559 in the past ten years with the combined value of these deals rising from €11.2 billion to €18.3 billion during the same period. This report aims to provide a detailed insight into the issues surrounding buy-outs of family firms using the unique data from the CMBOR database of over 26,000 European buy-outs in addition to three other detailed studies of the family buy-out market.
The first section of this report is based on data from the CMBOR database and gives a detailed breakdown of aggregate market statistics for family buy-out in Europe. This includes data such as the value and volume of buy-outs, employee data, deal pricing and structuring data, industry sector analysis as well as the exiting of family firms.
Section 2 looks at the problems faced by family firms when dealing with succession. In this part of the report issues covered include those surrounding the way that information flows between vendor and acquirer impact the transaction process and the level of planning undertaken by family owners with regard to succession.
In the third part the emphasis is on strategic issues surrounding family firm buy-outs. We examine whether there are distinct differences in the strategy of family businesses post buy-out and relate these to the ownership and governance of the firm pre buy-out.
The final part analyses the changes in managerial style which can occur after a family firm has undergone a buy-out. We examine whether there is a move away from the more family orientated stewardship form of management to an approach characterized by more formal governance with mechanisms of planning and control.
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