Value Creation in Buyouts

Title: Value Creation in Buyouts: Value-enhancement practices of private equity firms with a hands-on approach

Private equity emerges as an alternative financing source to bank loans and other types of financial instruments, such as stock and bond issuance. The fundamental operation of private equity firms is to acquire full or partial ownership stake in unlisted companies of high-growth potential, finance and assist in their growth, and sell them in 3-5 years. In Sweden and other European countries, the term “private equity” refers to one that makes invest-ments in other companies at different stages, including seed and start-up, expansion and buyout. This paper focuses entirely on buyout investments and aims at examining what private equity firms do to enhance value of their portfolio compa-nies following the buyout.


1 Introduction
1.1 Background
1.2 Problem Discussion
1.3 Purpose
1.4 Delimitations
2 Research Design
2.1 Methodology
2.2 Research Approach
2.3 Literature Review
3 Theoretical Framework
3.1 Governance Engineering
3.2 Financial Engineering
3.3 Operational Engineering
3.4 Strategic Redirection
3.5 Summary of Value-Creation Methods
4 Method
4.1 Company Selection
4.2 Data Collection
4.3 Data presentation and analysis
4.4 Method evaluation
5 Empirical Findings
5.1 Private Equity A
5.2 Private Equity B
5.3 Private Equity C
5.4 Private Equity D
5.5 Private Equity E
6 Analysis
6.1 Target companies and Investment criteria
6.2 Governance Engineering
6.3 Financial Engineering
6.4 Operational Engineering
6.5 Strategic Redrection
6.6 Timeframe
7 Conclusions
7.1 Reflections on the Study…

Source: Jönköping University

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