The Staying Power of Leveraged Buyouts

Steven N. Kaplan

NBER Working Paper No. 3653 (Also Reprint No. r1718)
Issued in May 1992
NBER Program(s):   ME

This paper documents the organizational status over time of 183 large leveraged buyouts (LBOs) completed between 1979 and 1986. As of August 1990, 63% of the LaOs are privately owned, 14% are independent public companies, and 23% are owned by other public companies As time since the LBO increases, the percentage of LBOs that have returned to public ownership increases. The (unconditional) median time LBOs remain private equals 6.70 years. This evidence suggests that the majority of LBO organizations are neither short-lived nor permanent. In addition the moderate fraction of LBOs assets owned by other (potentially related) companies implies that asset sales play a role in, but are not the primarily force motivating LBO transactions.

(494 K)

Published: Journal of Financial Economics, Vol. 29, pp. 287-313, (1991).

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