The importance of the acquisition process in private equity deals

• Autor(a) principal: Olivares, Rodrigo Henriques
• Data de Publicação: 2018
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10362/32558
• topic: Private equity; Acquisition process; Multiple of acquisition; Entry point; Domínio/Área Científica::Ciências Sociais::Economia e Gestão

The private equity (PE) industry has been growing in the last decades, helping to increase the number of merger and acquisition, therefore boosting the competition of industry and multiple prices in acquisition. PE firms present different features (compared to other investors) that might influence them to pay less for a target: PE investors requires greater returns due to illiquidity of the investment; there are no synergy gains in PE deals; the past experience of PE firms develops acquisition skills; and, some entrepreneurs want to receive investments from PE o make use of their know how and credibility. In a PE investment, even a successful development of a target with a good exit strategy should result in an unsuccessful deal if the PE firms pay high prices in the acquisition. For this reason, this article focuses on investigating if private equity companies have been more efficient in acquisition process than other investors.