TY  - JOUR
AU  - Cao,Jerry
AU  - Lerner,Josh
TI  - The Performance of Reverse Leveraged Buyouts
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12626
PY  - 2006
Y2  - October 2006
UR  - http://www.nber.org/papers/w12626
L1  - http://www.nber.org/papers/w12626.pdf
N1  - Author contact info:
Jerry X. Cao
Carroll School of Management
140 Commonwealth Avenue
Chestnut Hill, MA 02467
E-Mail: caoxi@bc.edu

Josh Lerner
Harvard Business School
Rock Center 214
Boston, MA 02163
Tel: 617/495-6065
Fax: 617/496-7357
E-Mail: jlerner@hbs.edu
AB  - Reverse leveraged buyouts (RLBOs) have received increased public scrutiny but attracted little systematic study. We collect a comprehensive sample of 496 RLBOs between 1980 and 2002 and examine three- and five-year stock performance of these offerings. RLBOs appear to consistently outperform other IPOs and the stock market as a whole, with economically and statistically meaningful positive returns. There is no evidence of a deterioration of returns over time, despite the growth of the buyout market: RLBOs performed strongly in the late 1980s, the mid-1990s, and the 2000s. Large RLBOs that are backed by private equity firms with more capital under management perform better. We also find the so-called quick flips--when private equity firms sell off an investment within a year after acquisition--underperform.
ER  -